From the 1st April 2020 the National Minimum & National Living Wage rates will increase.
The National Minimum Wage is a legally enforceable minimum level of pay and is the minimum wage that a worker should be paid. The exact level of pay is determined by an employee’s age and whether or not they are employed as an apprentice. All employers have to pay the minimum wage irrespective of the size of their business and correct payment is legally enforceable.
People sometimes ask for the clarification between The National Minimum Wage and The National Living Wage. The difference comes with employee’s ages. The National Minimum Wage is the minimum pay per hour almost all workers are entitled to. The National Living Wage is higher than the National Minimum Wage and workers will receive this if they are 25 and over.
The new rates that the Government are introducing will apply to the next pay period that begins on or after the 1st April 2020.
The new rates are:
National Living Wage – £8.72 per hour for ages 25 and over
National Minimum Wage – £8.20 per hour for ages 21-24
National Minimum Wage – £6.45 per hour for ages 18-20
National Minimum Wage – £4.55 per hour for school leaving age up to 17
National Minimum Wage for apprentices – £4.15 per hour
It should be noted that the rate for apprenticeships is only payable to those apprentices who are under 19 years of age or for those who are 19 and in their first year of apprenticeship. For apprentices who are 19 and over and have completed their first year of their apprenticeship are then entitled to the correct National Minimum Wage relevant to their age.
As an employer you are legally responsible for adopting these new rates into your payroll from 1st April. If your employees currently earn above these rates then there is no legal obligation for you to increase their pay in line with these rates, it only relates to people within these defined age brackets and level of employment.
If this affects you as an employer, we suggest it is good practice to notify your staff in writing of these changes as this demonstrates to your employees you have actioned the changes. It is worth pointing out that the changes in these rates will also feed through to employer obligations for workplace pensions when pay rises are awarded and will need to be actioned accordingly.
At Sence we offer dedicated payroll support to our clients and help guide employers through these changes and other related payroll issues.