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Changes to the Living Wage April 2018

NLW sqThe new levels of the National Minimum and Living Wage announced last autumn come into effect from 1st April, with the Living Wage rising from the current rate of £7.50 to £7.83 per hour.

Virtually every worker in the UK over compulsory school leaving age is legally entitled to be paid at least the National Minimum Wage, apart from people on certain apprenticeship schemes.

Minimum pay scales are governed by two different sets of UK-wide regulation:

  • National Living Wage regulations were passed through parliament in 2016 with the goal of ensuring that all over-25s will be paid at least £9 per hour by 2020.
  • National Minimum Wage regulations have been in force since 1999 and apply to employees under 25 and are still governed by the original National Minimum Wage regulations.

Penalties for employers who flout the regulations are punitive. If an employee can prove that they have not been paid correctly, HMRC can issue a fine and insist that employers pay any arrears. If these monies are still unpaid, the employment tribunal could impose fines of up to £20,000. To understand your obligations as an employer, visit the ACAS website.

Voluntary ‘Real Living Wage’ Scheme

In addition to this mandatory scheme, there is also a scheme known as the ‘Real Living Wagerun by the charity the Living Wage Foundation, which is based on the cost of living. This is currently £8.75 per hour (£10.20 in London) for all employees over 18.

There are currently around 3,500 accredited employers who support the scheme which, according to the Living Wage Foundation, helps them attract the best staff.

As a reputable consultancy with some 20 years experience, we understand the nature of the local job market, which means we can offer you guidance on the optimum hourly pay rates and salaries to attract the best candidates.

For more information about setting appropriate pay rates, please contact Tracy Welch at Priority Appointments on 01256 334575 or email us.

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