As reported in a previous bulletin, from 1 April 2016, the new national living wage for workers aged 25 and over came into force at a rate of £7.20 an hour. This will not change on 1 October 2016. It has also been confirmed that all national minimum wage rates will be increased in parallel from April 2017 and will be set by the Low Pay Commission’s recommendations.
It is important that employers comply with the new rates and penalties for non-compliance are increasing. The penalty for non-payment of the National Living Wage will be 200% of the amount owed, unless arrears are paid within 14 days. The maximum fine for non-payment will be £20,000 per worker. In addition, individual directors of employing entities who fail to pay the national living wage will be banned from being a company director for up to 15 years.
If you have any questions arising from this article or would like further information on the National Minimum Wage or National Living Wage rates, please get in touch with a member of our Employment team.