New National Minimum Wage Rates Announced 2016Back
As of 1st October 2016, the National Minimum Wage will be changing. It's essential that employers understand who is affected and make any necessary changes.
We've put together a quick guide so you can see exactly where you and your staff stand:
Staff employed under apprenticeships: the hourly rate will increase from £3.30 to £3.40
Staff aged under 18: the hourly rate will increase from £3.87 to £4.00
Staff aged between 18 and 20: the hourly rate will increase from £5.30 to £5.55
Staff aged between 21 and 24: the hourly rate will increase from £6.70 to £6.95
Since 1st April 2016, workers aged 25 and over have been entitled to the mandatory National Living Wage of £7.20 per hour, which is not changing from 1st October.
For a detailed overview of the implications of the National Living Wage, click here.
Penalties for failing to meet the new minimum wage rates
Whilst most employers will have no reason to fear potential penalties for failing to meet the new minimum wage rates, accidents can happen. The majority of incidents of non-compliance stem from administrative oversights, so it is essential all employers take steps to implement effective systems to manage the changes. Remember, it’s a criminal offence to avoid paying your staff the minimum wage.
If you are found guilty of failing to pay staff the minimum wage, you can be fined up to £20,000 and be made to pay 200% of the outstanding arrears. Staff morale and the reputation of your business is also likely to suffer as a result.
The changes are relatively straightforward but remember, they will also impact on your pension contributions and national insurance payments, so be sure to factor these in to the changes you make. If you’re unsure how the new minimum wage will impact on your company or you need any further advice, get in touch and we’ll be happy to help.