National Minimum Wage & National Living Wage Increases

Are you prepared for the increases to NMW and NLW on 1 April 2017?

The Government’s National Living Wage was introduced on 1 April 2016 for all workers aged 25 and over, and was set at £7.20 per hour.   Employers need to remember that the current National Minimum Wage for those under the age of 25 is still applicable.

The new rates from 1 April 2017 will be:

  • £7.50 per hour – 25 yrs old and over
  • £7.05 per hour – 21-24 yrs old
  • £5.60 per hour – 18-20 yrs old
  • £4.05 per hour – 16-17 yrs old
  • £3.50 for apprentices under 19 or 19 or over who are in the first year of apprenticeship

 How does NMW/NLW work in practice?

  • Most workers over school leaving age will be entitled to receive the NMW
  • The Low Pay Commission reviews the NMW / NLW rates annually
  • Employers can be taken to court by HM Revenue & Customs (HRMC) for not paying the NMW/NLW
  • The compulsory National Living Wage is the national rate set for people aged 25 and over.

Are there any exemptions?

There are a limited number of exemptions.  These do not relate to the size of the business, sector, job or region but to the people themselves who are not enttled to the NMW/NLW.  These people are those who are:

  • Self-employed
  • Volunteers or voluntary workers
  • Company directors
  • Family members, or people who live in the family home of the employer who undertake household tasks.

Remember – all other workers including pieceworkers, home workers, agency workers, commission workers, part-time workers and casual workers must receive at least the NMW.

Is the National Living Wage the same as the Living Wage?

The National Living Wage is different from the Living Wage, which is an hourly rate of pay and updated annually. The Living Wage is set independently by the Living Wage Foundation and is calculated according to the basic cost of living in the UK. Employers choose to pay the Living Wage on a voluntary basis whereas the National Minimum Wage and the National Living Wage are statutory.