As you may be aware, the current National Minimum Wage rates will increase in April 2020. Research suggests that the increase will result in a pay rise for almost 3 million UK workers and has been described as the ‘biggest ever cash boost’ for UK workers.These changes mean that:those aged 25 and over will be entitled to receive £8.72 per hour, up from £8.21 an hour previously
- workers 21-24 will increase from £7.70 to £8.20 an hour
- the pay for 18-20 year olds will increase from £6.15 to £6.45 an hour
- those over compulsory school age, but not yet 18 will get an hourly increase from £4.35 to £4.55
- and the apprenticeship National Minimum Wage, for those under 19 years of age, or over 19 but who are in their first year of their apprenticeship, will also increase from £3.90 to £4.15 an hour
Leading up to April you should ensure that, starting from the relevant date, the new hourly rates are reflected in staff salaries. It is important that you comply with the change, as unintentional errors could result in claims for unlawful deduction of wages. As National Minimum Wage rates are dependant on age, it is imperative that you double check information on employees’ date of birth ahead of time to ensure they will receive the correct wages.
It could be wise to notify your employees of the rise in pay ahead of time as this is likely to be well received by staff. It also offers an opportunity to explain that any overtime worked during a pay reference period prior to the new National Minimum Wage will still be paid at the previous rate.
Furthermore, if you already choose to pay staff over National Minimum Wage as part of a competitive benefits package you may want to consider increasing salaries further, in line with these changes, to keep your competitive advantage.
Although there are still a few months until the new rates are set in place, you should start preparing soon to avoid leaving implementation to the last minute. With employees becoming increasingly aware of their rights, any failure to comply with these new rates on time is sure to be noticed and could be a big risk to your company’s reputation.
Should you have any queries, please do not hesitate to contact us.