In previous years, increases to the National Minimum Wage have come into force in October. The Government has now decided however that any increases will take effect in April at the start of each new financial year.
What is the idea behind the minimum wage / living wage?
For those aged 25 or over, the Government now refers to the minimum wage as the National Living Wage. In spite of the name however, the Living Wage is in fact the lowest amount anyone in this age group can be paid.
So, what are your employees entitled to be paid?
The minimum wage is stated as an hourly rate, and there are separate minimum pay rates for the following age groups:
- Older than school leaving age but under 18
- 18 or over but under 21
- 21 or over but under 25
- 25 or over
‘School leaving age’ usually means age 16. However, school leavers whose 16th birthday falls during the summer holidays can leave school at the end of June of that year. If they wish to leave full-time education they can then either start an apprenticeship/traineeship, or can commence employment whilst continuing with part-time education or training.
Some employees who are classed as apprentices are not subject to the same minimum wage levels. Your company is entitled to pay a lower rate to any apprentice who is either below the age of 19, or is in the first year of an apprenticeship. Any apprentice who is in the second or subsequent year of an apprenticeship, and is aged 19 or over, must be paid the appropriate minimum wage for their age group.
New vs. Old Rates
Currently, the legal minimum hourly pay rates are:
|Older than school leaving age but under 18||£4|
|18 or over but under 21||£5.55|
|21 or over but under 25||£6.95|
|25 or over||£7.20|
|Apprentices below the age of 19, or in the first year of an apprenticeship||£3.40|
From April 1 2017, these will rise to:
|Older than school leaving age but under 18||£4.05|
|18 or over but under 21||£5.60|
|21 or over but under 25||£7.05|
|25 or over||£7.50|
|Apprentices below the age of 19, or in the first year of an apprenticeship||£3.50|