Changes to Pay for Employees
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Changes to pay for employees
From 1 April 2016 workers in the UK aged over 25 earning the minimum rate of £6.70 per hour will see a 50p increase; the government is calling this the National Living Wage. With a few limited exceptions, the National Minimum Wage will continue to apply to employees:
- Under 24 and above school leaving age (This is the last Friday in June of the school year they turned 16).
- Apprentices over 19 who have completed their first year of training.
It is our understanding that the rules will be strictly enforced. Failure to pay the rate an employee is legally entitled to will be classed as a criminal offence and can result in the employer being fined by HMRC.
Introduction of the National Living Wage comes at a time when employers are having to implement work place pensions for their employees via auto enrolment, with most SME businesses staging over the next two years. This will introduce additional costs for employers (including setting up a pension scheme, costs of ongoing management and of course employer pension contributions) and as with the National Living Wage, compliance is a necessity. The Pensions Regulator has suggested fines of £400 per day for companies that don’t comply with auto enrolment.
If you would like advice on the National Living Wage or
auto-enrolment, we’re here to help.
Contact us here