Changes to National Living and Minimum Wage
After the Budget was released last month, we would like to remind employers of the changes to the minimum wage rates which were implemented on the 1st April 2017.
Employees over the age of 25 (who are not in the first year of an apprenticeship) are legally entitled to receive £7.50 an hour, which is an increase of 30p per hour on last year’s amounts.
Below is a breakdown of all changes across the age ranges for minimum wage rates.
| DATE | 25 & Over (Living Wage) | 21 – 24 | 18 – 20 | Under 18 | Apprentice |
| Current | £7.20 | £6.95 | £5.55 | £4.00 | £3.40 |
| 1st April 2017 | £7.50 | £7.05 | £5.60 | £4.05 | £3.50 |
By law all employees are required to pay their employees these base amounts and the following pointers should be considered:
- If your employees receive tips, these cannot count towards their national minimum or living wage.
- Any deductions which could include deductions for poor timekeeping, costs of uniforms and/or tools must not take the employee below the minimum pay for their age group unless the contract allows for this in special circumstances.
It is worth pointing out that if you are found to be paying your staff below these minimum wage rates then you will be issued with a notice of underpayment. This notice will set out how much you owe your employees in arrears as well as the additional penalty imposed. Arrears which can go back several years, are paid at the current rate (which will be the highest rate) and you must pay the correct rates going forward. Your business will also be publicly named which could have reputational damage.
If you have any queries regarding employment issues or would like more information on how the team can work with you to improve employment practices in your company, please contact us on 01302 341 344.