Payroll Services and the Minimum Wage

by | Jul 13, 2015 | Payroll

Payroll Services and the Minimum Wage

by | Jul 13, 2015 | Payroll

The National Minimum Wage and the New Living Wage.

The government has announced that from October 2015 the national minimum wage rates will increase by 3% for workers aged 18 and over and 2% for 16-17 year olds. The largest increase this year will be to the apprentice rate, which is due to be uplifted by 21%.

The minimum wage rates for payrolls will be as follows, from October 2015:

  • 21 and over = £6.70 per hour, an increase of 20p per hour
  • 18 to 20 year olds = £5.30 per hour, an increase of 17p per hour
  • 16 to 17 year olds = £3.87 per hour, an increase of 8p per hour
  • Apprentices aged 16 – 18 and those aged 19 or over in their first year = £3.30 per hour, an increase of 57p per hour*

(*All other apprentices are entitled to the National Minimum Wage for their age.)

It is mandatory for employers to pay the minimum wage, and there are penalties for non-compliance. Indeed, in March 2015, the then Business Minister, Jo Swinson said:

“There’s no excuse for companies that don’t pay staff the wages they’re entitled to, whether by wilfully breaking the law, or making irresponsible mistakes.

The government is protecting workers by cracking down on employers who ignore minimum wage rules. In addition to naming and shaming, we’ve increased the penalty fines and boosted the resources available to investigate non-compliance.”

Making sure that all minimum wage legislation is adhered to is just one of the payroll services that we supply, ensuring that your payroll is quick, efficient and accurate. This will ensure that you don’t become one of the 210 companies named and shamed by the government for underpaying the minimum wage. These companies have received total penalties of over £248,000. Contact us for payroll services from JLP.

What is the proposed Living Wage and how is it Different to the Minimum Wage?

In his recent summer budget, the Chancellor George Osborne said there would be a new, compulsory Living Wage from April 2016.

It will be paid to all workers aged 25 and above. Initially, it will be set at £7.20 an hour, with a target of it reaching more than £9 an hour by 2020. Both Part-time and full-time workers will get it.

The minimum wage will remain in place, so the living wage, which will be compulsory, will be a top-up for workers aged 25 and over.

Contact us if you need help with your payroll services and, in particular, if you have any questions about the national minimum wage and the Living Wage.


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