The national living wage (NLW) and national minimum wage (NMW) rates will increase on 1 April 2017. Future increases will be applied each April rather than October as previously.
By law, all workers must be paid at least the NLW if they are aged 25 or over, or the NMW rate relevant to their age if they are younger.
National living wage (NLW) and national minimum wage (NMW) rates are as follows from 1 April 2017 (from 1 October 2016 in brackets):-
NLW – aged 25 and over £7.50 (£7.20)
NMW – 21 to 24 year olds £7.05 (£6.95)
NMW – 18 to 20 year olds £5.60 (£5.55)
NMW – 16 to 17 year olds £4.05 (£4.00)
NMW – apprentices £3.50 (£3.40)
To coincide with a £1.7m campaign to raise awareness of the NMW HMRC has published a list of the worst excuses given by unscrupulous employers who were paying less than the statutory requirement.
Some of the most bizarre excuses include:-
- The employee wasn’t a good worker so I didn’t think they deserved to be paid the National Minimum Wage.
- It’s part of UK culture not to pay young workers for the first 3 months as they have to prove their ‘worth’ first.
- I thought it was ok to pay foreign workers below the National Minimum Wage as they aren’t British and therefore don’t have the right to be paid it.
- She doesn’t deserve the National Minimum Wage because she only makes the teas and sweeps the floors.
- I’ve got an agreement with my workers that I won’t pay them the National Minimum Wage; they understand and they even signed a contract to this effect.
- My workers like to think of themselves as being self-employed and the National Minimum Wage doesn’t apply to people who work for themselves.
- My workers are often just on standby when there are no customers in the shop; I only pay them for when they’re actually serving someone.
- My employee is still learning so they aren’t entitled to the National Minimum Wage.
- The National Minimum Wage doesn’t apply to my business.
Any underpayment of NMW or NLW can attract a penalty of up to 200% of the underpaid amount, up to £20,000 per worker, with a minimum penalty of £100 per worker, and employers can be publicly named if the amount due exceeds £100 and they have been issued with a notice of underpayment by HMRC.
HMRC’s enforcement budget for the NLW/NMW was increased significantly during 2016, increasing the number of compliance officers available to investigate complaints.