The National Living Wage – will it live up to expectations?
On 1 April 2016, the national minimum wage will be increased significantly for all workers aged over 25. The aim is that this new “National Living Wage” will be increased to a £9 compulsory hourly rate by 2020.
What you need to know
- The first increase will take place on 1 April 2016 when workers will receive the first 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.
- The National Living Wage will change every year on 1 April whilst the National Minimum Wage will change on 1 October every year.
- There are fears that jobs will actually be lost. The retail sector is anticipating the loss of up to 900,000 jobs as a result of the National Living Wage and the Apprenticeship Levy.
- Potentially 74,000 shops could close, with Wales and the North of England being particularly hard hit.
- Over six million workers should benefit from this increase.
The penalty for non payment of the National Living Wage 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. Employers who fail to pay will be banned from being a company director for up to 15 years.
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, redundancies or changes to terms and conditions that businesses may need to consider.
Individuals will need to make sure that they are being paid the correct rate.