National Living Wage – NEW employer must take action

From 1 April 2016 the Government’s new National Living Wage will become law. This legislation will run alongside the National Minimum Wage, however slightly different conditions apply.

If someone is working and aged 25 or over and not in the first year of an apprenticeship, they will be legally entitled to at least £7.20 per hour. That’s an extra fifty pence per hour in their pocket, above the current National Minimum Wage limits. The Government has said it is committed to increasing the rate each year.

As an employer, you’ll need to make sure you’re paying your staff correctly from 1 April 2016, as the National Living Wage will be enforced as strongly as the current National Minimum Wage. This will no doubt also include naming and shaming employers who do not comply and as a reminder, this is what that looks like - Naming and shaming February 2016 list.

Employees

The Government has designed a calculator to help employees find out if they are eligible for the National Living Wage - calculator for workers.

Employees will be expecting to see the increase in their pay automatically from 1 April and will be encouraged to check their payslips to ensure their employer has complied.

Employers

The Government has advised employers to take their four steps of advice as follows:

  1. Check you know who is eligible in your organisation. Find out on GOV.UK’s employment status page
     
  2. Take the appropriate payroll action. There is useful guidance in HMRC’s tutorials. If you are a customer of Armstrong Watson’s payroll services, then you will need to contact your payroll administrator to discuss the process. Unless the current hourly rate is stored in the payroll system, an automatic uplift isn’t possible i.e. if you advise payroll what to pay, rather than a set number of hours, they will not have the correct data.  Please ensure those of you reading this, who require this service contact your payroll service provider as soon as possible; there are no additional charges for this service with Armstrong Watson, but there are heavy penalties if you don’t comply; so act now.
     
  3. The Government is encouraging employers to let your staff know about their new pay rate
     
  4. Check your staff under 25 are earning at least the right rate of National Minimum Wage.

You can find out everything you need to know about the new National Living Wage, including the new rates of pay, on the employers’ National Minimum Wage page. If you still have any queries that are not addressed visit the Acas page for further information and assistance, or contact Armstrong Watson Payroll and Employee Services at payrollsupport@armstrongwatson.co.uk.

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