The Living Wage Starts on 1st April
The National Living Wage comes into effect from 1st April 2016, under which millions of workers over 25 will see their minimum pay rate rise from ?6.70 to ?7.20.Those under the age of 25 will continue to receive the lower pay rates of the National Minimum Wage.
Who and How Many will benefit from the living wage?
It is expected that mainly three groups of workers in particular will benefit from the introduction of the National Living Wage: workers between the ages of 25 and 30; people still working over the age of 66; and Women who are over-represented in minimum wage jobs.
The Resolution Foundation believes that 4.5 million workers will benefit from the NLW this year, whilst the official figures from the Office for Budget Responsibility calculate that?1.3m workers will see an immediate pay rise with the numbers rising to 2.9m by 2020. Indeed, when taking into account the likely?”spill-over” effect – as other workers get a pay rise to maintain pay differentials – as many as 6 million workers could see an increase in pay by 2020.
The Office for Budget Responsibility (OBR) has predicted that tens of thousands of workers could lose their jobs – or see their hours reduced – as employers try to compensate for the extra cost,?whilst Government Advisers have said that the overall cost to business this year could be over ?1 billion.
Are You Ready For The National Living Wage?
Whatever the effects of the National Living Wage turn out to be, it becomes law on 1st April 2016, and there will be penalties from HMRC for non-compliance.