Next month the Government’s new national living wage will become law. That means that from 1 April 2016 workers in the UK who are aged over 25 and not in the first year of an apprenticeship will be legally entitled to at least £7.20 per hour. That is an increase of 50p on the current minimum rate of £6.70 per hour.
The Government predicts that over a million workers in the UK are set to directly benefit from the increase, with many seeing their pay packets rise by up to £900 per year.
For employers, this means that they need to make sure that they are paying staff correctly from 1 April 2016. Employers who do not comply with the living wage face financial penalties of up to £20,000. Penalties for non-payment also include 200% of the amount owed to the employee, unless the arrears are paid within 14 days in which case 100% of the amount owed is payable.
Employers need to make sure that they have taken steps to ensure that they are ready for the change on 1 April.
1. Check who is eligible in their organisation.
2. Ensure that payroll is updated.
3. Inform staff of their new rate of pay.
4. Check that staff who are not entitled to receive the national living wage (those under 25 or in the first year of their apprenticeship) are earning at least the right rate of national minimum wage.
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