Chancellor increases National Living and Minimum wage rates

The National Living Wage for those aged 25 and over will increase from £7.50 per hour to £7.83 per hour from April 2018.

Chancellor Philip Hammond confirmed in his budget speech that the government would accept the new rates recommended by the Low Pay Commission.

Over 2 million people are expected to benefit. For a full-time worker, it represents a pay rise of over £600 a year.

The National Minimum Wage will also increase as follows:

21 to 24 years – £7.38 per hour

18 to 20 years –  £5.90 per hour

16 and 17 years – £4.20 per hour

Apprentices – £3.70 per hour
  
It’s a criminal offence for employers to not pay someone the National Minimum Wage or National Living Wage, or to fake payment records.

Employers who fail to pay the minimum rates face penalties of 200% of the amount owed, unless the arrears are paid within 14 days. Offenders also risk being named by the government.

The maximum fine for non-payment of the minimum rates is £20,000 per worker. Employers who fail to pay can be banned from being a company director for up to 15 years.

HM Revenue and Customs officers have the right to carry out checks at any time and ask to see payment records. They can also investigate employers if a worker complains to them.

It’s the employer’s responsibility to keep records proving that they are paying the minimum wage – most employers use their payroll records as proof. All records must be kept for 3 years.

Please contact Robert Bedford if you would like more information about the issues raised in this article or any aspect of employment law.