National Living Wage and National Minimum Wage

With the introduction of the new National Living Wage on 1st April 2016 it is a good time to remind ourselves of the rules that are pertinent to both this new law and the National Minimum Wage.

The new National Living Wage affects those employees who are more than 25 years old on 1st April 2016.  From 1st April 2016 these employees have to be paid a minimum of £7.20 per hour.

Employees reaching 25 for the National Living Wage and employees reaching the National Minimum Wage age limits as below should be paid the increased rate in the “Pay Reference Period” after their birthday i.e. If an employee, who is paid monthly at the end of a month, celebrates their birthday during one month they would be paid the increased rate from the first of the next month.

National Minimum Wage (per hour) and the age limits:

Year

21 and over 18 to 20 Under 18 Apprentice*
From October 2015 £6.70** £5.30** £3.87**

£3.30**

*Apprentices who are 19 or over, who have completed their first year, are also entitled to the National Minimum Wage for their age.

**These are minimum amounts – Employers are free to pay more than these hourly rates.

It should also be noted that “deductions that benefit the employer” such as deductions for uniform or tools cannot take an employee’s wages below the National Minimum.

If you have any queries on the above then please call our payroll department on 01844 260111.

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