A new law protecting the low-paid is here and 4.5 million Brits are expected to benefit from it. From April 1 2016, all workers aged 25 and over must be paid a new compulsory National Living Wage (NLW) of £7.20 an hour. It will gradually increase to £9 an hour by 2020.
Here are all the facts and figures employers and workers need to know.
- Those in first year of an apprenticeship
- Self-employed people and volunteers
- They will face fines of up to £20,000 per worker
- They could be disqualified from running companies
For employees/small business
- Find out who’s eligible. Check GOV. UK’s employment status page
- Assess staff payroll – who is affected? Take appropriate action
- Inform your staff know about their new pay rate
- Ensure staff under 25 are earning at least the right rate of National Minimum Wage. That’s 6.70 if you’re 21 or over, £5.30 if you’re 18-20 and £3.87 if you’re under 18. You can find out the full wage rules on GOV.UK’s National minimum wage page
The new NLW has the potential to cause problems for small businesses. Perhaps the most appropriate response is to plan your finances and figure out how to absorb these costs. This is especially important considering the other changes to employment law that are being rolled out over the next few months, such as auto-enrolment pensions and the changes coming to holiday pay, overtime and commission.