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New National Minimum Wage and National Living Wage increases and what you need to do

The national minimum wage applies to anybody that has reached the school leaving age, with the national living wage applying to those aged 25 and over.

The current rates along with the new rates are below:

Year 25 and over 21 to 24 18 to 20 Under 18 Apprentice
April 2019 (current rate) £8.21 £7.70 £6.15 £4.35 £3.90
Apr-20 £8.72 £8.20 £6.45 £4.55 £4.15

 

So, if you currently employ a 22-year-old who is earning less than £8.20 per hour then you will need to ensure that person receives a pay increase to at least £8.20 for April 2020 in order to comply with the new legal rates.

What should I do as an employer?

A common question we get asked is “What should I do as an employer?” as such here are some steps, we encourage employers to take:

  • Review your current employed workforce’s hourly rates and compare against the new rates;
  • Identify those who will no longer be compliant with the new rates;
  • Ensure that whoever conducts your payroll is notified with a request to increase those identified to the appropriate rate;
  • Communicate any changes in pay to those identified with the supporting explanation as to why these changes are being made;
  • Update your employee records to reflect any changes; and
  • Review your payroll for April as soon as possible and certainly before approving it;  to ensure that expected changes have been made to ensure compliance with the new rates.

If you have outsourced your payroll services then your provider will help to ensure you remain compliant with the new legislation. However it is important to contact them to enquire about any changes that may be required.

If you would like more information on this topic or if you are thinking of outsourcing your payroll services then please feel free to get in touch at info@whittockconsulting.co.uk and we would be pleased to help.