October's National Minimum Wage increases

On October 1st 2016 this year’s National Minimum Wage (NMW) increases came into effect, a change which sees young workers receive a pay rise of up to £450. The NMW and National Living Wage (NLW) is reviewed annually by the Low Pay Commission, and this year’s change sees both workers aged 21 to 24 years as well as apprentices seeing an increase to their earnings.


The new rate for 21 to 24 year olds will be £6.95 per hour, a 25p increase on last year. 18 to 20 year olds will now be paid a minimum £5.55 per hour, also up 25p from last year, while 16 to 17 year olds will be paid a minimum of £4 per hour, a rise of 13p compared to 2015. Apprentices, meanwhile, will be paid a minimum

hourly rate of £3.40 which is 10p more than the previous rate.

Source: Acas

The National Living Wage, introduced in April 2016 for workers aged 25 and over, will remain the same at £7.20 per hour. That is at least until April of next year, where they will be reviewed once again, and after that each April annually.


As always, employers and their HR providers will by now have updated the required changes in order to bring their payroll records in line with the new laws. Workers are being reminded to ensure that their payslips after October 1st are in line with the new NMW rates.


Non-compliance can result in the employer having to pay the difference between what a worker has been paid and what they should have been paid under the new NMW legislation. Further non-compliance could result in financial penalties.


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