National Minimum and Living Wage Increase

What You Need to Know as an Employee and an Employer…

As of Saturday the 1st April 2017 there will be changes to the National Minimum Wage (NMW), and the National Living Wage (NLW). You may have already heard about them, but there are some things you may not know about the wage increase, which could directly affect you.

 

Why is the National Minimum Wage and National Living Wage Increasing?
The Government wants to move from a low wage, high tax, high welfare society, to a higher wage, lower tax, lower welfare society. In previous years the minimum wage has not paid enough for some people to live on – this means that people have needed to pay higher taxes. The Government then takes this money and feeds it back through the state in the form of benefits to ‘top-up’ peoples pay cheques.

However, this year, a number of factors has influenced positive change within the Houses of Parliament: Due to record employment, the highest GPD growth in the G7, over 2 million jobs created since 2010 and 1.1 million more forecast by the Office for Budget Responsibility (OBR), the Government believes now is the right time to take action to ensure low wage workers can take a greater share of the gains from growth.

The new National Living Wage is an essential part of this. It ensures that work pays, and reduces reliance on the state topping up wages through the benefits system as it has done previously.

 

What should employees on NMW and NLW look out for?
Changes in Your Pay Cheque
Your pay should automatically change on April 1st 2017 if you fit the criteria to be earning money within either of these pay brackets.

NMW Increase:
If you are working, and are below the age of 25 then you should be earning the NMW as per the rates below: (taken from this link)

NLW Increase:
As per the above, if you are not in your first year of an apprenticeship, are working and are aged 25 and over, you are legally entitled to earn the NLW as a minimum amount of money you take home. Until 31 March 2017, this is set at £7.20 per hour. From 1 April 2017, it will go up to £7.50 per hour.

 

How could this impact me as an employee?
If your employer isn’t up to speed it means your pay cheque may not be rectified accordingly, if it isn’t talk to your manager first before contacting a Government body, as honest mistakes do happen. If you’re unsure what your hourly rate is and whether you are being paid fairly then use the Government calculator to check.

 

How this could affect you as an employer:
Not paying someone the amount they are legally entitled to earn is a criminal offence, even if it is a mistake. Make sure you are ready for April 1st and if any mishaps occur, resolve the problem immediately. The Government website can tell you more and help to ensure you are ahead of the game.

Here at Prime Appointments we employ over 450 temporary members of staff across Essex and Suffolk, we’re all ready for the National Minimum and National Living Wage increase – are you?