The Government’s National Living Wage is introduced today, on 1 April 2016 for all working people aged 25 and over, and will be set at £7.20 per hour. The current National Minimum Wage for those under the age of 25 will continue to apply. Employers need to ensure that they are paying their employees the correct rates of pay in all instances.
Generally all those who are covered by the National Minimum Wage, and are 25 years old and over, will be covered by the National Living Wage these include:
- employees
- most workers and agency workers
- casual labourers
- agricultural workers
- apprentices who are aged 25 and over and who have completed their first year of apprenticeship.
Penalties for failure to comply
With the introduction of the National Living Wage the penalty for non-payment will be 200% of the amount owed, unless the arrears are paid within 14 days.
The maximum fine for non-payment will be £20,000 per worker. However, employers who fail to pay will be banned from being a company director for up to 15 years.
The Low Pay Commission
The Low Pay Commission which currently recommends the level of the minimum wage will recommend any future rises to the National Living Wage rate.
The difference between the National Living Wage and the Living Wage
The new National Living Wage is different from the Living Wage, which is an hourly rate of pay and updated annually. The Living Wage is set independently by the Living Wage Foundation and is calculated according to the basic cost of living in the UK. Employers choose to pay the Living Wage on a voluntary basis.
Details provided by ACAS
