201604.04

The National Living Wage

Employers are reminded that a new statutory minimum rate of pay, the National Living Wage (NLW), applies to workers aged 25 and over from 1 April 2016. The NLW replaces the current National Minimum Wage (NMW) rate for these workers and is set at an initial rate of £7.20 per hour.

Also from 1 April 2016, penalties for non-payment of the NMW are doubled from 100 per cent of the arrears to 200 per cent, reduced by half if the employer pays the sum owing within 14 days. The maximum penalty remains at £20,000 per worker. In addition, anyone found guilty of the offence will be considered for disqualification from being a company director for up to 15 years. The enforcement rules apply equally to non-payment of the NLW.

The Department for Business, Innovation and Skills has updated its guidance on the NMW to take account of the changes.

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