National Living Wage – Stiff penalties for non compliance

Money

On the 1st of April 2016 the National Living Wage takes effect, this means employees that are 25 years old and over are legally entitled to receive a ‘National Living wage’ of £7.20 per hour, which is a 50 pence increase in the National Minimum Wage.

Employers that don’t comply will risk being named and shamed and tough penalties of up to 200% of arrears and a maximum of £20,000 per worker.

Payroll departments should be assessing before this date whether or not they should be making any changes and making sure that employees are informed of any changes.

Also from April 2016

The personal allowance is set to increase to £11,000 from April removing more lower paid workers out of the tax bracket.

For employees under 25, the ‘National Minimum Wage’ will still apply, the rates will be rising to;

£6.70 for 21s and over
£5.30 for 18 to 20-year-olds
£3.87 for under 18s
£3.30 for apprentices (the rate applies to all apprentices in year 1 of an apprenticeship, and 16-18-year-old apprentices in any year of an apprenticeship)