From 1 April 2016 a compulsory National Living Wage of £7.20 per hour for workers aged 25 and over will come in to effect. This new National Living Wage will be available not only for employees and workers, but also apprentices aged 25 and over, casual labourers and agricultural workers. It is expected that by 2020 that this National Living Wage will rise to £9.00 per hour or over.
The new National Living Wage is not the same as the ‘Living Wage’, which is assessed in accordance with the basic cost of living in the UK, and which employers can voluntarily choose to pay. The rate for this ‘living wage’ is currently £9.40 per hour in London and £8.25 for the rest of the UK.
For those worker under 25 the National Minimum Wage will remain in force, and will continue to be updated on 1st October every year.
Failure to pay employees the correct rate of pay will result in penalties being levied against the employer and this will be up to 200% or double the value of the underpayment owed, unless the full amount to the employee or worker is paid within 14 days.
The maximum fine for non-payment will be £20,000 per worker and failure to pay could result in an employer being banned from being a company director for you to 15 years.
Guidance for this can be found at: