Employers are reminded that the following changes to the National Minimum Wage (NMW) rates came into effect on 1 October 2015:
The adult NMW rate increased from £6.50 to £6.70 per hour;
The NMW rate for workers aged 18 to 20 increased from £5.13 to £5.30 per hour;
The NMW rate for 16- and 17-year-olds increased from £3.79 to £3.87 per hour; and
The apprentice rate of the NMW, which applies to apprentices aged 16 to 18 and those aged 19 or over who are in the first year of their apprenticeship, increased from £2.73 to £3.30 per hour.
The accommodation offset increased from £5.08 to £5.35 per day.
The new National Living Wage (NLW), announced in the Chancellor of the Exchequer's July Budget, is due to come into force in April 2016. It will apply to workers aged 25 and over and will be paid at an initial rate of £7.20 per hour.
On 1 September 2015, the Government announced that the penalty for non-payment of the NMW or the NLW will be doubled to 200 per cent of the arrears. This will be halved if the employer pays the penalty within 14 days. The overall maximum penalty of £20,000 per worker remains unchanged.
In addition, a new team of HM Revenue and Customs compliance officers will be set up to investigate the most serious cases of non-payment of the NMW and the NLW and take forward criminal prosecutions for deliberate non-compliance with the law.
If you would need advice either as an employer or employee do not hesitate to contact us.