On Easter Sunday, 1 April 2018, all the national minimum wage (NMW) and national living wage (NLW) rates will be going up.
NLW for those aged 25 and over will increase by 4.4% from £7.50 per hour to £7.83 per hour from April 2018.
NMW will increase as follows:
21 to 24 year olds
18 to 20 year olds
16 and 17 year olds
From April 2018
£7.38 per hour
£5.90 per hour
£4.20 per hour
£3.70 per hour
Note that the rates change for the first pay period that begins on or after 1 April. So if this is in the middle of a pay period, the rates do not change until the beginning of the next pay period. For some people, for example those who are paid quarterly, it can be some time before the rate has to be paid if 1 April is in the middle of a pay period.
HMRC has told us that employers are more likely to be at risk of getting it wrong for workers paid at or slightly above minimum wage rates. Other common minimum wage errors include:
To find out more see the guidance National Minimum Wage and National Living Wage on the website of the Department for Business, Energy and Industrial Strategy.
It is important that employers understand the NNW rules so that employees receive at least the minimum pay they are legally entitled to. HMRC is stepping up enforcement and failure to pay the correct amount could result in financial penalties of 200% of the pay owed, the risk of being publicly named, and even the possibility of a criminal prosecution.