On 1 April 2020 the Government will introduce increases to the National Living Wage (NLW) and National Minimum Wage (NMW).
Those receiving the NMW will see their pay increase as shown in the below table:
| Age | April 2019 were: | New rates from 1 April 2020 will be: |
| 25+ | £8.21 per hour | £8.72 per hour |
| 21-24 | £7.70 per hour | £8.20 per hour |
| 18-20 | £6.15 per hour | £6.45 per hour |
| Under 16-17 | £4.35 per hour | £4.55 per hour |
| Apprentices* | £3.90 per hour | £4.15 per hour |
*Applicable only to apprentices aged 16 to 18 and those aged 19 or over who are in their first year. All other apprentices are entitled to the National Minimum Wage for their age.
As National Minimum Wage rates are dependent on age, it is imperative that you double check information on your employees’ date of birth ahead of time to ensure they will receive the correct salary.
The NLW is also set to rise from £8.21 to £8.72 per hour and will mean that 2.8 million full-time workers will see a £930 boost to their annual earnings.
The Government claims that the introduction of the NLW, which is available to those aged 25 and over, has delivered the fastest pay rise for the lowest earners in 20 years. Chancellor Sajid Javid has said that the Government intends to expand the reach of the NLW to cover workers aged 23 and over from April 2021, and to those aged 21 and over within five years.
National Minimum and Living Wage rates are reviewed annually, and changes are usually effective from April each year.
Although there are still a few months until the new rates are set in place, you should start preparing as soon as possible, to ensure that all payroll procedures are updated and ready in time for the deadline.
As part of our standard payroll service, PM+M will increase hourly rates for our clients as necessary to meet the minimum requirements when the changes come into effect, unless you instruct us to implement a higher amount.
All of this is good news for employees, but another compliance minefield for employers. For further information about the changes or a discussion about how the changes may affect you, your business or your employees, please do not hesitate to get in touch with Julie Mason using the below enquiry button.
