New national minimum wage rates introduced
Posted on in Business News
As of 1st October, employers are required to pay new National Minimum Wage (NMW) rates.
The updated rate for staff aged 21 and over has increased by 20p to £6.70 per hour while staff aged between 18 and 20 are entitled to £5.30 per hour and employees aged under 18 are entitled to £3.87 per hour. The new rate for apprentices is £3.30 per hour. These are the biggest increases since 2007.
As before, the apprentice rate applies to apprentices aged 16 to 18 and those aged 19 or over who are in their first year. All other apprentices are entitled to the NMW for their age.
Vince Cable, the Business Secretary, said this increase would be worth £416 a year for a full-time worker on the minimum wage. He said the independent commission had struck "a delicate balance between what is fair for workers and what is affordable for employers, without costing jobs".
However, 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.
According to ACS's report submitted to the Low Pay Commission, 58% of retailers will cut staff numbers, 61% of retailers will cut the number of staff hours in their business whilst 40% of shop owners will be forced to take on more hours themselves because of the higher NMW.
It also revealed that 62% of retailers will put investment plans on hold as their optimism for the future is at its lowest level for 2 years.
Whilst the new NMW will affect many retailers cash flow, failing to comply could be much worse. The maximum penalty for not paying the national minimum wage increased from £20,000 per employer to £20,000 per employee back in May 2015.
How will the new NMW affect your business? Let us know by commenting below.
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.