Businesses reminded of changes to National Minimum Wage

From 1 October the UK national minimum wage (NMW) has increased for all workers under the age of 25.

For the 270,000 workers aged 21– 24 in the UK earning the NMW this means they have seen their hourly wage rise to £6.95 from £6.70, which for those working a typical 35 hour week will mean an annual pay rise of £450 a year.

For NMW workers under the age of 21, but older than 18, their rate has also increased by 25p from £5.30 to £5.55, and for apprentices their pay has gone up by 10p to £3.40.

The youngest recipients of NMW, those aged 16-17, will have seen their wage rate increase from £3.87 to £4 per hour.

The wage rise follows the introduction of the national living wage (NLW) of £7.20 an hour for workers aged 25 and over from April 2016, which is set to increase to £9 an hour by 2020.

The government has become significantly stricter with employers in recent years and those that fail to meet the NMW may find themselves publically named and shamed by HM Revenue & Customs (HMRC), alongside receiving a penalty.

A recently revised penalty regime applies to any notice of underpayment relating to a pay reference period beginning on or after 1 April 2016.

Under this new regime the penalty percentage has increased from 100 per cent to 200 per cent of the amount underpaid up to a maximum penalty of £20,000 per worker.