21st  September 2016

INFORMATION UPDATE

 Issue No.  2016/20

 Sentient
              

 

 NATIONAL MINIMUM WAGE

With effect from 1st October 2016 the following National Minimum Wage rates, will take effect:

National Living Wage

Current Rate

New Rate

Change

Workers 25 and over

£7.20

 

No Change

National Minimum Wage

Current Rate

New Rate

Change

Workers aged 21 to 24

£6.70

£6.95

+25p (3.7%)

Workers aged between 18 and 20

£5.30

£5.55

+25p (4.7%)

Training Rate*

£5.30

£5.55

+25p (4.7%)

Workers aged between 16 and 17

£3.87

£4.00

+13p (3.4%)

Apprentices**

£3.30

£3.40

+10p (3%)

Daily accommodation offset

£5.35

£6.00

+65p

*Paid for the first 6 months of employment to those aged 22 and over and for whom you are providing accredited training. 

**Apprentices under the age of 19, or 19 and above but still in their first year of Apprenticeship. 

Unlike in previous years, the new rates are set to last for six months only (from 1 October 2016 to 30 March 2017). This reflects a change in the minimum wage calendar. The National Living Wage was introduced on a different cycle to the other rates – changing in April rather than October. Following a review, the Government has concluded that the rates for all workers should be aligned in April next year. The Low Pay Commission is to report in the Autumn on the level of all the rates to apply in April 2017 including the National Living Wage and new rates for the minimum wages.

Naming and Shaming
The Government recently publicly named and shamed almost 200 companies who failed to pay the minimum wage to their employees. 

The list of 198 firms owed a total of £466,219 in arrears and included football clubs, recruitment firms, care homes and hairdressers.

Top of the list was a London restaurant which owed almost £100,000 to 30 employees.

The Department for Business, Energy and Industrial Strategy said all the money owed had been paid back to workers.

The list was the largest of its kind since the "naming and shaming" scheme was introduced in October 2013.

This acts as a reminder that it is not only the employee that could make a claim if they are not being paid the National Minimum Wage, but HMRC can pursue a criminal prosecution against those employers suspected of flouting the National Minimum Wage law. 

There are six potential criminal offences under the National Minimum Wage Act:

  • Employer refuses or wilfully neglects to pay National Minimum Wage
  • Person fails to keep or preserve records
  • Person knowingly causes or allows false entry in records
  • Person produces or furnishes false records or information
  • Person intentionally delays or obstructs compliance officer
  • Person refuses or neglects to answer any questions or produce documents for compliance officer

The maximum fine for offences under the National Minimum Wage is £20,000 per worker.  Therefore to avoid a fine and criminal record, employers should check that their employees are being paid the National Minimum Wage (see above) and that appropriate pay records are being maintained.  


 

 

 

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