National Living Wage
  • 23rd Mar 2016
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The National Living Wage comes into effect on 1st April 2016, meaning that employers will have to pay eligible workers aged 25 and over the National Living Wage (NLW) of £7.20 an hour.  This means that workers aged  25 or over will be paid a premium of 50 pence an hour, over younger workers, aged 21 to 24.

The NLW supplements the National Minimum Wage (NMW) and employers must still continue to pay younger eligible workers the National Minimum Wage.  The existing provisions for determining whether the NMW has been paid, will also apply to the NLW.

Rates between 1st April until 30th September 2016:

Apprentices:                        

£3.30 per hour

Under 18 years old                

£3.87 per hour

Aged 18 – 20 

£5.30 per hour

Aged 20+

£6.70 per hour

Age 25+ (NLW)

£7.20 per hour

Rates between 1st October to 31st March will be:

Apprentices:                        

£3.40 per hour

Under 18 years old                

£4.00 per hour

Aged 18 – 20 

£5.55 per hour

Aged 20+

£6.95 per hour

Age 25+ (NLW)

£7.20 per hour

The National Living Wage is expected to increase annually.  In some cases, employers can offset a maximum daily deduction from NMW for accommodation.

The maximum penalty which employers could face for non-compliance with the legislation, is increasing to 200% of the underpayment due to each worker, although, this penalty may be reduced where employers comply with the underpayment notice within 14 days.  

Employers not complying with requirements set out in the legislation, may also be guilty of a criminal offence.  BIS also have the power to name and shame employers who have been found to be underpaying staff.

Employers should take specific advice in respect of each situation.