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National minimum wage set to rise

Its good news for lower paid workers who will see another rise in their hourly rates of pay, the 8th increase since the minimum rate was introduced in 2010.

From 1 April, 2017 new hourly rates will be:

  • 25 years and over rate will rise from £7.20 to £7.50 (National Living Wage)
  • 21 and over rate will rise from £6.95 to £7.05
  • 18 and over rate will rise from £5.55 to £5.60
  • Under 18 rate will rise from £4.00 to £4.05
  • Apprenticeship rate will rise from £3.40 to £3.50

The apprenticeship rate only applies to workers under 19 or those that are in the first year of their apprenticeship, otherwise, the rates of pay are in relation to their age, as above.

When the new rate is payable

The new rates of pay apply to the first full pay period after 1 April – for example, if you are paid on the 25th of the month, you will not get the new rate of pay for the month 26/03/17-25/04/17. The new rate will become payable for the period 26/04/17 – 25/05/17.

All workers, including part-time workers, casual, agency, pieceworkers, home workers and commission workers must receive at least the NMW.

Exemptions

You are not entitled to the NMW if you are self-employed, work as a volunteer, are a company director or a family member or someone that lives in the family home of your employer.

Penalties for non-payment

It is against the law for employers to pay less than the national minimum wage. There are very serious consequences for employers who do not pay the correct rate.

If you are affected, you should try talking to your employer first. If that has no effect you should make a formal grievance to your employer.

If these steps do not resolve the issue, you can ask HMRC to investigate. If the employer has breached their legal obligations, they will be issued with a notice and given 14 days to pay the arrears.

The penalty for non-payment starts at 200% of the amount owed. However, the maximum fine is up to £20,000 for EACH worker affected. In addition, employers can also be banned from being a company director for up to 15 years.

The difference between NLW and NMW

The National Living Wage is different from the National Minimum Wage. The NLW rate is set by the Living Wage Foundation and is a voluntary rate of pay that employers are not legally bound to adhere to.

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