National Living Wage Comes into Force

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The National Living Wage has come into effect in the UK which means that from 1st April 2016 all workers aged 25 and over will be entitled to earn at least £7.20 per hour.

This will cover employees, casuals, agency workers, apprentices over 25 – who are not in the first year and agricultural workers.

The current National minimum wage rates will continue to apply. As soon as an employee reaches their 25th birthday, they will be entitled to the national living wage. The current hourly minimum wage rate is:

  • £6.70 for workers aged 21 and over
  • £5.30 for 18-20 year olds
  • £3.87 for under 18’s
  • £3.30 for apprentices aged between 16 and 18

As the employer, it is your responsibility to keep records to demonstrate that you are paying National minimum wage. All records have to be kept for three years.

The penalty for failing to pay the national living wage will be 200% of the amount owed to workers – up to a maximum of £20,000 per worker – unless arrears are paid within 14 days. Employers who fail to pay will be banned from being a company director for up to 15 years.

HM Revenue & Customs (HMRC) has a right to carry out checks and ask to see payment records at any time.

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