National Minimum Wage Changes
On 14 March 2016 the Prime Minister announced changes to the National Minimum Wage, with wages being increased by between 3% and 4.7%.
The National Minimum Wage is reviewed annually by the Low Pay Commission and these recent changes to the National Minimum Wage were prompted by the Low Pay Commission’s Spring 2016 recommendation report. To see the recommendations in full, please see the Low Pay Commission’s Spring 2016 report here.
The increases to the National Minimum Wage follow swiftly after the recent introduction of the National Living Wage for workers aged 25 and over, which was set at £7.20 per hour from 1 April 2016.
The increases in the National Minimum Wage are to take effect from 1 October 2016 and the hourly rates which will now apply are listed in the far-right column below:
|Worker Age/Type||OLD rate from 1/10/15 (£/hr)||NEW rate from 1/10/16 (£/hr)|
|16 to 17||3.87||4.00|
|18 to 20||5.30||5.55|
|21 to 24||6.70||6.95|
Future changes to the National Minimum Wage will be rolled out annually in April of each year. The next change to the National Minimum Wage will therefore be due in April 2017.
1 October 2016 is an important date to note for employers and employees as it is from this date that the new rates will apply. Employers paying less than the new rates after 1 October 2016 will consequently be in breach of their obligations to their employees. Some of the potential penalties employers in breach could face are:
- Payment of up to 200% of the arrears due
- Criminal prosecution by the Crown Prosecution Service
- Disqualification of company directors for up to 15 years
If you require any advice or support in relation to an employment issue, please contact Ellis Jones’ specialist employment experts Kate Brooks and Hannah Roberts on 01202 057752, or by email at Kate.Brooks@ellisjones.co.uk / Hannah.Roberts@ellisjones.co.uk