Employers should be preparing now for the increases in the National Minimum Wage that apply for pay periods on or after 1 April 2017.
The increase in the National Living Wage is a large one – 30p per hour – the other changes are smaller, resulting in a bigger gap between the NLW and the other rates.
The new rates are as follows:
• National Living Wage (for adults aged 25 or over): £7.50 per hour
• adult rate, for workers aged 21 to 24 (except where the apprenticeship rate applies): £7.05
• development rate, for workers aged between 18 and 20 (except where the apprenticeship rate applies): £5.60
• young workers rate, for workers aged under 18 but above the compulsory school age and who are not apprentices: £4.05
• apprenticeship rate, for apprentices aged under 19 or those aged 19 and over but in the first year of their apprenticeship: £3.50.
The Government is to spend £1.7 million on a campaign to make sure that workers are aware of the above increases. This may be necessary given HMRC’s recent list of what it considers to be the 10 worst excuses given in the last 12 months for not paying the minimum wage. The National Minimum Wage was introduced back in April 1999 so you would think that all employers would be clear about the rules, but obviously not!
1. The employee wasn’t a good worker so I didn’t think they deserved to be paid the National Minimum Wage.
2. It’s part of UK culture not to pay young workers for the first 3 months as they have to prove their ‘worth’ first.
3. I thought it was ok to pay foreign workers below the National Minimum Wage as they aren’t British and therefore don’t have the right to be paid it.
4. She doesn’t deserve the National Minimum Wage because she only makes the teas and sweeps the floors.
5. I’ve got an agreement with my workers that I won’t pay them the National Minimum Wage; they understand and they even signed a contract to this effect.
6. My accountant and I speak a different language – he doesn’t understand me and that’s why he doesn’t pay my workers the correct wages.
7. My workers like to think of themselves as being self-employed and the National Minimum Wage doesn’t apply to people who work for themselves.
8. My workers are often just on standby when there are no customers in the shop; I only pay them for when they’re actually serving someone.
9. My employee is still learning so they aren’t entitled to the National Minimum Wage.
10. The National Minimum Wage doesn’t apply to my business.
HMRC says that calls to its helpline from interns who are working unpaid, or for expenses only, are being fast-tracked for investigation.