The National Living Wage – what you need to know
Earlier on this year, George Osborne announced a new National Living Wage which will see a £9 compulsory hourly rate to be introduced by 2020.
Workers are currently entitled to the national minimum wage which for workers who are aged 21 or over is £6.70 per hour.
What you need to know
• The first increase will take place in April 2016 when workers will receive an increased rate of £7.20 per hour.
• It will only apply to those workers aged 25 or over. This means that the national minimum wage will continue for those aged under 25.
• There are fears that jobs will actually be lost. Tesco has recently announced its concern that when companies also factor in the apprentice levy and increasing business rates, this could, in their words, amount to a “lethal cocktail”.
• It is anticipated that up to 60,000 will lose their jobs as a result of this change which will increase costs. This could particularly hit small businesses very hard.
• There will be help for businesses. Corporation tax will be cut by 2% and there will also be some help for small firms as the employment allowance will be increased by 50% to £3,000.
• Over six million workers will benefit from this increase.
What we can do for you
The introduction of the national living wage could cause some difficulties for employers. We can guide you through any restructures or redundancies businesses may need to consider.
Individuals will need to make sure that they are being paid the correct rate from April 2016 onwards.