National minimum wage – get it right!

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

Apprentices

From April 2018

£7.38 per hour

£5.90 per hour

£4.20 per hour

£3.70 per hour

Current rates

£7.05

£5.60

£4.05

£3.50

 

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: 

  • unpaid working time – not paying all the hours worked by staff. For example, time spent travelling between work assignments or during training;
  • deductions from a worker’s pay, or payments by workers to their employer for items or expenses that are connected with their job such as uniforms; and
  • failing to apply the correct rate of pay for apprentices in their second year.

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.

 

Anonymous