New National Minimum Wage from October
Posted on in Business News , Cycles News , Creative News, Outdoor News, Political News
New National Minimum Wage (NMW) rates coming into force on 1 October 2016.
From 1 October 2016 the rates for the NMW will rise as follows (current rates shown in brackets together with percentage increase):
- Apprenticeship rate: £3.40 (£3.30 +3%)
- Workers ages 16 to 17: £4.00 (£3.87 +3.4%)
- Workers aged 18 to 20: £5.55 (£5.30 +4.7%)
- Workers aged 21 to 24: £6.95 (£6.70 +3.7%)
The National Living Wage (NLW) will continue to apply, currently set at £7.20 per hour, for all workers aged 25 and above. The NLW is expected to increase in April 2017, with NMW also rising again on that date to bring the two rates into alignment. As yet, we do not know what next year's increases will be although the government previously expressed an ambition for the NLW to hit £9 by 2020 - which would require annual rises of between 6 and 7%.
The impact of higher wages on small businesses has long been argued. The Association of Convenience Stores (ACS) has warned of the negative impact these above inflation minimum wage increases have on retailers' ability to retain staff numbers and hours as well as their other detrimental effects. It therefore came as no surprise to learn that the ACS Local Shop Report,showed a decrease in staff hours in convenience stores.
Whilst the new NMW will affect many retailers cash flow, failing to comply could be much worse. If an employer doesn't pay the correct rate, a worker can raise a formal grievance with their employer or complain to HMRC who will in turn investigate the matter. If HMRC finds that an employer has not paid at least the correct rate, they can send a notice of arrears and impose a penalty.
From April 2016 the maximum penalty increased from 100% of arrears to 200% or arrears (but is halved if paid within 14 days). The overall maximum penalty per worker remains unchanged at £20,000. Business owners who fail to pay can also be banned from being company directors for up to 15 years.
More information
If you need advice on the latest changes in Employment Legislation or any aspect of employment law, ActSmart's partner DAS can help.
Our partnership with legal experts DAS means ActSmart subscribers can access 24 hour UK based helplines, covering the following subjects:
- Commercial & Legal Advice
- Human Resources
- Health & Safety
- Tax Advice
- Assistance in the event of business emergency (fire, flood etc)
- Confidential counselling for owners, their staff and immediate family members
- The team at ActSmart head office are always available to offer common sense advice and support
24 hour unlimited access
Unlike many other legal and business support helplines, ActSmart offer subscribers 24 hour, unlimited access to DAS business support. To access the helplines click on the button below.