The National Minimum Wage is increased with effect from 1st October. This is the minimum hourly rate that can be paid by employers. They take effect from the first “pay reference period” starting on or after 1st October. Therefore, for a weekly paid worker who is paid for a 5 day working week commencing each Monday and who is paid one week in arrears on the following Thursday then the increase takes effect from the week commencing Monday 6th October, and paid on Thursday 16th October. For monthly paid workers then it will obviously take effect from 1st October.
The rates depend on the age of the worker, and the new rates are follows:
- Workers aged 21 and above – the new rate is £6.50 per hour, increased from £6.31.
- Workers aged 18 to 20 – the new rate is £5.13 per hour, increased from £5.03.
- Workers aged 16 to 17 – the new rate is £3.79 per hour, increased from £3.72.
The rate paid to workers who are engaged under an apprenticeship scheme is increased to £2.73 from the previous rate of £2.68.
The National Minimum Wage is policed by HM Revenue & Customs who can not only instruct employers who have not complied to pay back-pay to the worker but also charge substantial penalties for non-compliance.
Particular care should be taken by employers who have agreed a net-pay arrangement with their workers to ensure that increases in the tax-free allowances do not cause the gross-pay to inadvertently fall below the above rates.