Increases in the National Minimum Wage, affecting workers under 25 and apprentices, will come into effect from 1 October after the Government accepted the recommendations from the Low Pay Commission. The new National Minimum Wage rates will be:
- £6.95 per hour for those aged 21 to 24 years old. This is an increase of 3.7%
- £5.55 per hour for 18 to 20 year olds. This is termed the youth development rate and is an increase of 4.7%
- £4.00 per hour of 16-17 year old rate. This is an increase of 3.4%
- £3.40 per hour for an apprentice. This is an increase of 3%.
The accommodation offset will increase from the current £5.35 to £6 per day.
The rate for apprentices is for those apprentices aged 16 to 18 and those aged 19 or over who are in their first year. All other apprentices are entitled to the NMW for their year.
For workers aged 25 and over, the Government has introduced the National Living Wage at a rate of £7.20 from 1 April 2016. The Low Pay Commission will make recommendations this autumn on the rate of the National Living Wage to apply from April 2017, with a target for the rate to reach 60% of median earnings by 2020, subject to sustained economic growth.
The NMW is the minimum pay per hour workers are entitled to by law. Of course businesses can choose to pay more than the minimum rates set out above.
Paying workers correctly and in compliance with the law is crucial. Employers who fail to pay workers at least the correct minimum wage risk being publicly named and shamed, facing a financial penalty and may even be prosecuted.
If you are unsure about what your legal obligations in relation to pay are, please contact NFU CallFirst on 0370 845 8458.
Further information about National Minimum Wage rates can be found on the Gov.UK website