The government has announced a big increase in the national living wage and national minimum wage rates for 2020/21. What are they and when do they take effect?
The government has announced the national living wage (NLW) and the four national minimum wage (NMW) rates which will take effect on 1st April 2020. You should budget for the effect on your payroll.
From 1st April 2020 the:
National Living Wage, which is payable to all workers aged 25 and over, will rise from £8.21 to £8.72 per hour. This is a 6.2% increase.
Adult rate of the National Minimum Wage, which is payable to all workers who are aged 21 to 24 years old, will rise from £7.72 to £8.20 per hour. This is a 6.5% increase.
Youth development rate, which is payable to all workers who are aged 18 to 20 years old, will rise from £6.15 to £6.45 per hour. This is a 4.9% increase.
Young workers rate, which is payable to workers aged under 18 will rise from £4.35 to £4.55 per hour. This is a 4.6% increase.
Apprentice rate will rise from £3.90 to £4.15 per hour. This is a 6.4% increase.
The apprenticeship rate is only payable to apprentices who are under 19 years of age and those who are 19 and over but in the first year of their apprenticeship. Apprentices 19 and over who have completed their first year of apprenticeship are entitled to the correct National Minimum Wage rate for their age.
If you pay National Living Wage and National Minimum Wage rates, it’s advisable to notify staff in writing that these payments will be increased. This will confirm that you’ve actioned the new rates and help to avoid unnecessary queries. Also, keep a close eye on National Living Wage and National Minimum Wage rate increases that are required due to a change in an employee’s age and notify them when this takes effect too.