From April 1st 2017 the national minimum wage and national living wage will be going up for workers in the UK. Find out more about the increase in this blog post, including the new rates and how you can ensure you are being paid the correct amount by your employer.
National Minimum Wage Increase for Those Under 25
If you are under 25, you are legally entitled to at least the national minimum wage (NMW); the rates differ dependant on your age, with those under 18 entitled to at least £4.00 per hour, to those between 21 and 24 entitled to £6.95 per hour – employers can pay you more per hour if they see fit.
The new rates will see an increase of up to 10p an hour for those currently receiving minimum wage:
|21 to 24||18 to 20||Under 18||Apprentices (First Year or Under 19)|
What Is The National Living Wage?
The national living wage (NLW) was introduced on April 1st 2016 for those aged over 25, the current NLW rate is £7.20 per hour and was introduced to counter the rising cost of living. The NLW was set in accordance with a percentage (55%) of the current median income across the UK.
There is also the ‘Living Wage’. This is an unenforced recommendation for what employers should pay set by the living wage foundation – the current rates sit at £8.45 nationwide and £9.75 in London. Many large employers across the UK already pay this wage including Aviva, Nationwide and GSK, but is less common in smaller businesses who cannot afford to pay their employees this rate.
National Living Wage Increase for Those Over 25
|Rate||National Living Wage 25 +|
Rates for Apprentices
The current rate for an apprentice is £3.40 per hour, and is rising to £3.50 an hour under the new rates, however, this only applies to those in the first year of their apprenticeship or those who are under 19. For example:
Example A: Katie is 26 years old and in the first year of apprenticeship. This means although she is entitled to the NLW rate of £7.50 per hour she will be paid the first year apprentice rate of £3.50 per hour until the second year of her apprenticeship.
Example B: Josh is 18 years old and in the second year of his apprenticeship, this means he will be paid the minimum apprenticeship rate of £3.40 until he turns 19, when his pay will increase to £5.60 per hour.
I’m Not Being Paid What I’m Owed by My Employer
You can check if you are currently receiving minimum wage or national living wage, or if your employer is underpaying you by using the GOV.UK minimum wage calculator.
It is illegal for your employer to pay you below minimum wage so if you find you are being paid under the NMW/NLW, you should talk to your manager so they can arrange to reimburse you. If you don’t feel comfortable talking to your manager – you can contact acas for confidential help.
Need A Hand? Ensure Compliance with First Call Financials
If you are an employer, you’ll want to ensure your workers are being paid the wage they are entitled to. Outsourcing your payroll to an accountant is the perfect solution to ensure your employees are paid the correct amount, on time, and ensuring compliance with current rates to avoid any pay disputes or fines from HMRC.
If you want to find out more about the current national wage rates, or our managed payroll service give one of our friendly team a call on 0117 3790810
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This post was written by Steph Roffey