New National Minimum Wage (NMW) and National Living Wage (NLW) rates come into effect on 1 April 2018. The NLW first came into effect on 1 April 2016 and is the minimum hourly rate that must be paid to those aged 25 or over. The NLW increases by 33p to £7.83. This represents an increase of 4.4%.
The hourly rate of the NMW increases to £7.38 (a rise of 33p) for the 21-24 year old’s. The rates for the 18-20 year old’s, increases to £5.90 (a rise of 30p) and the rate for workers above the school leaving age but under 18 increases to £4.20 (a rise of 15p). The NMW rate for apprentices increases by 20p to £3.70.
The new rates mirror the recommendations made by the Low Pay Commission (LPC) which were accepted in full by the Government. The independent LPC was established following the National Minimum Wage Act 1998 to advise the government on the NMW. It is made up of representatives from all sides of industry.
HMRC investigates all complaints of employers failing to pay minimum wage, and there are significant penalties for employers found to have paid workers less that they are entitled to by law. HMRC’s enforcement budget has significantly increased the number of officers investigating minimum wage complaints.
