Posted on 21 September 2016
Are you aware the National Minimum Wage increases from 1st October 2016? The new rates come into force from this date and are listed below.
From October 2016 the new rates will be:
£6.95 per hour - 21-24 years old
£5.55 per hour 18 - 20 years old
£4 per hour - 16-17 years old
£3.40 for apprentices under 19, or 19 and over who are in the first year of apprenticeship.
The rate will then change every April starting April 2017. The new pay rate will only affect someone's pay from the first full pay reference period after that date. These changes do not affect the National Living Wage rates, which remain the same until April 2017.
It is against the law for employers to pay workers less than the National Minimum Wage or to falsify payment records. A worker can make a complaint to HMRC who will investigate the complaint. If HMRC find that an employer hasn't paid at least the National Minimum Wage, they can send a notice of arrears plus a penalty for not paying the correct rate of pay to the worker. These rules also apply for the National Living Wage.
With the introduction of the National Living Wage the penalty for non-payment will be 200% of the amount owed, unless the arrears are paid within 14 days, this applies to both the National Living Wage and the National Minimum Wage. The maximum fine for non-payment is £20,000 per worker. However, employers who fail to pay can be banned from being a company director for up to 15 years and the company could also be publically named by the government.
If you are uncertain of how the introduction of the new rates will affect you, or are not sure how or when to implement them, Smith Cooper have a team of experts who can advise you of the processes you need to follow. If you would like any help in understanding how Smith Cooper can help you to minimise your risks please contact any member of our Payroll Services Team.