Minimum wage rates to rise in April

The government has announced a 6.2% increase in the National Living Wage (NLW), which applies to workers aged 25 and over.

From 1 April 2020 the NLW will rise from the current rate of £8.21 to £8.72 an hour, in the largest increase since it was introduced two decades ago.

The new rate will result in an annual increase of £930 for 2.8 million full-time workers earning the NLW.

Workers aged under 25 earning the National Minimum Wage (NMW) will also see increases of between 4.6% and 6.5%, depending on their age.

Bryan Sanderson, Chair of the Low Pay Commission (LPC), commented “The NLW has been an ambitious long-term intervention in the labour market.  The rate has increased faster than inflation, faster than average earnings and faster than most international comparators.  This has raised pay for millions without costing jobs, although employers have had to make a variety of other adjustments to deal with the increases.”

The new rates from April 2020

• The National Living Wage for ages 25 and above up 6.2% to £8.72
• The National Minimum Wage for 21 to 24-year-olds: up 6.5% to £8.20
• For 18 to 20-year-olds: up 4.9% to £6.45
• For under-18s: up 4.6% to £4.55
• For apprentices: up 6.4% to £4.15

A four-step checklist for employers:

1. Know the correct rate of pay (including the National Living Wage)
2. Find out which staff are eligible for which rates
3. Update the company payroll and keep an eye out for future announcements
4. Communicate the changes to staff as soon as possible

More compliance for employers

It is unsurprising to see that may small (and indeed) large business owners are finding running their payroll an increasingly complex and time-consuming task.  The compliance obligation on employers has never been greater and there has never been a better time to consider outsourcing your payroll.

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