Only
one month to go before employers must start paying the increased minimum wage of
£7.20 an hour to employees age 25 and over. The National Living Wage comes into force on 1st April 2016.
For employees age 25+ that you’re currently paying the National Minimum Wage of £6.70
an hour, it’s only an additional 50p an hour.
However if they work full time, the government estimates it will mean a
£900 a year pay rise – and £900 per person a year additional cost for you.
The
government says it intends to enforce the new National Living Wage as robustly as
it has the National Minimum Wage. This
will mean repayment of arrears to the employees, penalties and naming &
shaming – so there will be reputational damage.
Employers
underpaying the National Minimum
Wage now face a
maximum £20,000 penalty per person. A selection
of the companies – many of them SMEs – that have already been named & shamed
for failing to pay the National Minimum Wage include:
·
Abbey House
Hotel, Barrow-in-Furness, failed to pay £13,468 to 13 employees.
·
Richard Lewis
Communications plc, Southampton, failed to pay £8,751 to 3 employees.
·
Kiddy Academy
Hunts Cross Ltd, Liverpool, failed to pay £8,297 to 2 employees.
·
Oldham
Premier Plumbing Supplies Ltd, Oldham failed to pay £6,270 to 1 employee.
·
Matt Jenkins
Dressage, Chipping Norton, failed to pay £6,184 to 1 employee.
·
Merritime
Nursery, Gosport, failed to pay £5,344 to 1 employee.
·
JG’s Hair
& Beauty Ltd, Northallerton, failed to pay £3,427 to 3 employees.
·
Ocean Dental
Implant & Aesthetic Clinic, Manchester, failed to pay £2,819 to 2
employees.
·
Woodside
Nursery School, Waterlooville, failed to pay £2,799 to 1 employee.
·
Petersfield
Joinery Ltd, Petersfield, failed to pay £2,720 to 1 employee.
·
Helping Hands
Day Nursery Ltd, Tilbury failed to pay £2,629 to 1 employee.
·
Centra Link
Ltd, Calne, failed to pay £1,483 to 1 employee.
The National Minimum Wage is £6.70 an hour and
this falls to £5.30 an
hour for the development rate for those aged 18-20, £3.87 an hour for the young
workers aged 16-17, and to £3.30 an hour as the apprentice rate.
This is what you will need to do:
·
Check
age and pay data for your employees to identify whether any will be age 25+ in
April and are currently paid below £7.20 an hour.
·
If
you will need to increase some individuals’ hourly rate, budget for the
increase from April 2016.
·
Consider
across-the-board cost of living increases for other low paid employees in order
to maintain pay differentials.
Contact The Human Resource on 07884 475303 for help and advice with paying The National Living Wage from 1st April, e.g. calculating additional costs, planning to offset them and the policy implications, plus communicating the change to your employees.
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