National Minimum Wage and the new National Living Wage - reminder

National Minimum Wages (NMW) rates increased last October – see 'National Minimum Wage rates increase today'.

A reminder that the new National Living Wage (NLW) is due to be introduced from April 2016 with the result that those employed and aged 25 or over at that time will be entitled to receive the NLW as an addition to the NMW; the new NLW rate is £7.20 an hour, an increment of 50p on the NMW.

The NMW will continue to apply for those aged under 25 at the appropriate rates with the premium added on top for those aged 25 and over, taking the total hourly rate to the NLW.

Operators will need to prepare appropriately as along with the increase, the financial penalty for breaching both the NLW and NMW will rise from 100% of the underpayment to 200%. There is also a risk of HMRC naming and shaming any companies who do not comply.