The National Minimum Wage (NMW) is a minimum amount per hour that most workers in the UK are entitled to be paid.
The following NMW rates increases come into effect from 1 October 2015:
- • the adult rate will increase by 20 pence to £6.70 per hour
- • the rate for 18 to 20 year olds will increase by 17 pence to £5.30 per hour
- • the rate for 16 to 17 year olds will increase by 8 pence to £3.87 per hour
- • the apprentice rate will increase by 57 pence to £3.30 per hour.
The government will introduce a new mandatory National Living Wage (NLW) for workers aged 25 and above from April 2016. This will initially be set at £7.20 which is a 50p increase in the adult rate of NMW coming into force in October 2015, representing an increase of in excess of £1,200 per annum in earnings for a full-time worker on the current NMW.
In addition to the above increases the supermarket chain Lidl has recently announced a minimum wage busting hike in pay for its UK staff of £8.20 per hour, or £9.35 per hour in London from October, which may yet cause a ripple effect through other retailers.
It is clear that the increase in minimum wage will impact on not only the retail sector, but also those in hospitality, as well as care providers and the farming community who may need to absorb such pressures through a reduction in profit, or if they are able to, by passing these costs on through small price rises.
Penalties may be levied on employers where HMRC believes underpayments have occurred and HMRC may ‘name and shame’ non-compliant employers.
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