This Saturday (1st October) sees an increase to the National Minimum Wage for certain age bands.
The new rates are:
- £6.95 per hour for 21-24 year olds (from £6.70 in 2015)
- £5.55 per hour for 18-20 year olds (from £5.30 in 2015)
- £4 per hour for 16-17 years old (from £3.87 in 2015)
- £3.40 for apprentices under 19 (from £3.30 in 2015)
- £3.40 for apprentices 19 and over who are in the first year of apprenticeship (from £3.30 in 2015)
Dan Docherty, Head of People Products at Sage, a provider of integrated accounting, payroll and payment systems, offers this checklist for employers:
- Avoid penalties from HRMC for not paying the National Minimum Wage: in a nutshell, businesses need to make sure that they understand which employees are eligible for which rates, what the correct rates are, that the company payroll is updated in time for 1st October and communicate any changes to their employees.
- Pension Auto Enrolment: until now, your minimum wage workforce may have been under the threshold for auto enrolment. The National Minimum Wage update is likely to lift more employees into the auto enrolment bracket – therefore businesses will have to assess who in their workforce this will apply to, and communicate with their employees and pension providers as appropriate. Online resources such as Pension PlayPen can help companies find out more about what pension support and options are available.
- What other impacts and opportunities could this change have on your business? This change isn’t just about how much you are paying your employees per month, there will also be knock-on impacts on business cashflow to think about too, such as subsequent increases in tax and National Insurance.
