29th March, 2016

National Living Wage

National Living Wage
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From 1 April 2016 the new National Living Wage (NLW) comes into force.

This will affect most employers who pay the current minimum wage and it must be noted that the NLW is a significant increase on the current National Minimum Wage.

The effect of this increase on your business cannot be under estimated as margins will be decreased and the cost of your labour will increase. Non compliance is not an option so it is important that you identify all staff who will be subject to the new NLW and ensure that the new rates are implemented for the first pay date after April 1 2016.

In brief, the National Living Wage should be applied to all staff who are aged over 25 and is to be paid at the rate of £7.20 per hour.

This rate should be used for all pay dates after April 1 2016

We will ensure that all of our clients are aware of this change, however, if you are not a client of PGA you should ensure that your payroll services provider has implemented the new rates as they will be monitored and the penalties for non compliance can be severe. Please note these rates do not apply for Directors of Limited Companies

All staff who are under 25 are still subject to the rates of pay under the National Minimum Wage unless they are in the first 12 months of an apprenticeship, for information the National Minimum Wage tables are included below. These have been effective since 1 October 2015.

Year        21 and over     18 to 20     Under 18          Apprentice*  
2015 (current rate)          £6.70     £5.30      £3.87           £3.30

The National Minimum Wage will rise once again in October 2016 and then again in April 2017, from then onwards both the the National Living Wage and the National Minimum Wage will be increased on April 1 of each year.

As always, if you require any advice or assistance regarding the National Living Wage or the National Minimum Wage, please give us a call on 01666 822256 and we will be pleased to help.

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