National Minimum Wage increase commences this weekend

28th September 2016

Employers are reminded that the new National Minimum Wage (NMW) rates are coming into force this weekend from 1st October 2016.

The increased NMW rates are set to rise by between three and 4.7% for those aged under 25 and apprentices, with small business owners urged to ensure the new rates are implemented for all hours worked from 1 October onwards.

The UK Government recently outed almost 200 businesses for failing to pay their staff the correct wage in line with the NMW. Indeed, since the Government has sought to crack down on NMW in October 2013, almost 700 employers have been publicly outed, amounting to more than £3.5m in wage arrears.

HM Revenue & Customs (HMRC) benefits from increasingly wide-ranging abilities to carry out compliance checks and therefore employers must do what they can to ensure they get it right, even if it means contacting HMRC directly through the pay and work rights helpline.

If an employer is found to have paid the incorrect wage rate, a worker can raise a formal grievance with their employer via HMRC, who will subsequently investigate the matter further. If HMRC finds an employer has been negligent in failing to pay at least the correct rate, they can send a notice of arrears and impose a financial penalty.

From April 2016, the maximum penalty increased from 100% of arrears to 200 per cent of arrears; though this is halved if the amount is paid in full within 14 days of receipt of the penalty.

The new NMW rates will rise as follows (existing rates displayed in brackets including the percentage increase):

  • Apprenticeship rate: £3.40 (£3.30 – 3%)

  • Staff aged 16-17: £4.00 (£3.87 – 3.4%)

  • Staff aged 18-20: £5.55 (£5.30 – 4.7%)

  • Staff aged 21-24: £6.95 (£6.70 – 3.7%)

Image: Images Money

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