National Minimum Wage hike to hit your business

James Potts - Legal Services Director

February 03 2020

The government has announced new National Minimum Wage and National Living Wage rates—promising the “biggest cash increase ever” for UK workers.

Here’s what the new rates mean for you.

Pay rises across the board

From the 1st April 2020, you need to give any worker on the National Living Wage or the National Minimum Wage a pay rise. 

Here’s the breakdown of the new rates:  

  •  £8.72 per hour for workers aged 25 and over (up from £8.21 per hour)
  •  £8.20 per hour for workers aged 21 to 24 (up from £7.70 per hour)
  • £6.45 per hour for workers aged 18 to 20 (up from £6.15 per hour)
  • £4.55 per hour for workers aged under 18 (up from £4.35 per hour)
  • £4.15 for apprentices aged under 19 (up from £3.90)

The minimum rate of pay varies for apprentices aged 19 and over. After the first year of apprenticeship, you need to increase your apprentice’s pay to the National Minimum Wage for their age group or the National Living Wage if they’re aged 25 or over.

Prepare your payroll for April

Whatever category your worker falls into, you need to prepare your payroll to meet the new rates in time for April.

That means making sure you give staff the right wage for their age category, and keeping track of when workers move into a higher paid age group.   

It’s important to pay the right wage. Every year, HMRC catches hundreds of businesses for paying below the minimum rates of pay and forces them to pay out thousands of pounds.

Remember, the minimum wage increase is just one of the major employment law changes to hit businesses in April 2020.

Statutory Sick Pay is set to go up to £95.85 per week and the new rate for Statutory Maternity, Paternity, Adoption and Shared Parental Pay is set to rise to £151.20 per week.

And that’s just the start…

The Good Work Plan hits

Several ‘Good Work Plan’ laws come into force in April, in what some are calling “the largest upgrade to workers’ rights in a generation”.

And with good reason.

The Good Work Plan introduces fundamental changes to how you manage staff. These range from how you issue contracts to how you calculate holiday pay for certain workers.

It also provides workers with more rights, such as preventing the use of contracts that can deny agency workers equal pay.

You can read more about the Good Work Plan changes in detail here. But for the moment, all you need to know is there are a lot of new employment laws that affect your business. Fortunately, there’s still time to prepare.

Prepare now to prevent worry later

If you’re a Peninsula client, contact the 24/7 HR and employment law advice line today.

We talk you through the new minimum wage rates and help make sure that you’re ready for every April legal change.  

Plus, we provide expert advice on how to keep staff costs under control. This includes helping to create contracts and policies that give you flexibility in staff working hours and help reduce overheads.

And if you’re not a Peninsula client, don’t worry. You can still get a free advice call to help you meet the new laws and keep your business safe. Call 0800 028 2420

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