Source – Croner TaxWise 28 March 2019
From 1st April 2019, the national living wage (NLW) for those aged 25 years and over will increase to £8.21 per hour. Minimum wage rates will also increase across the various age categories, rising to £7.70 per hour for 21-24 year olds, £6.15 per hour for 18-20 year olds and £4.35 per hour for those over the compulsory school age but not yet 18. The apprenticeship rate for those under the age of 19, or 19 and over but in the first year of their apprenticeship, will also increase to £3.90 per hour.
These changes will apply to any pay reference periods that begin on or after 1st April, which means your client’s HR and payroll representatives will need to work in unison to identify individuals who earn the NMW, or close to this rate, and ensure their salaries are increased accordingly.
A failure to amend minimum pay rates accordingly will leave them open to claims in the employment tribunal and with HM Revenue and Customs (HMRC). The latest set of employment tribunal (ET) figures from October-December 2018 shows that in relation to wages continue to increase as staff becomes more aware of their rights, with over 4,000 claims made during this period alone.
Failure to abide by NMW law can also expose to naming and shaming by HMRC resulting in potential financial penalties and reputational damage. This risk is likely to be exacerbated further from 6th April, when the right to an itemised payslip will be extended to include workers for the first time, making it easier for both your workers and HMRC, should an investigation take place, calculate whether NMW has been paid.