National minimum wage and national living wage to increase

The National Minimum Wage (Amendment) Regulations 2018 have now been laid before parliament.

The Regulations provide for the expected annual increase to the minimum wage and national living wage with effect from 1 April 2018 as follows:-

  • over 25 years – £7.83 (previously £7.50)
  • 21-24 years – £7.38 (previously £7.05)
  • 18-20 years – £5.90 (previously £5.60)
  • under 18 years – £4.20 (previously £4.05)

What is National Minimum Wage?

The National Minimum Wage is a minimum hourly rate of pay set by the government which applies, with some exceptions, to all workers who are over the compulsory school age.

What is National Living Wage?

The National Living Wage (introduced in July 2015) is the lowest hourly rate that can be paid to an employee who is aged 25 or older.

Head of Employment Law, Christine Hart comments “It is important that employers review the sums that they pay to salaried employees as a result of the increase in National Minimum Wage caps. In circumstances where employees are expected to work additional hours without additional remuneration, there may be a risk that the actual hourly rate received by the employee when taking into account this unpaid overtime falls below the minimum wage threshold.”

“If HMRC find that an employer hasn’t paid at least the National Minimum Wage, they can impose a penalty for not paying the correct rate of pay. With the introduction of the National Living Wage the penalty for non-payment will be 200% of the amount owed, unless the arrears are paid within 14 days. The maximum fine for non-payment will be £20,000 per worker. However, employers who fail to pay will be banned from being a company director for up to 15 years.”