The introduction of the National Living Wage represents the biggest increase to minimum pay rates since the bandings were introduced in 1999. Workers aged 25 and over who earn the current minimum wage rate of £6.70 will earn an extra 50p per hour from April 2016 – never have any of the original rates seen such a large jump at one time.
Although the new rate is not in place until April, employers should act now to ensure they are ready to comply when the law changes. Considering the points below will make compliance easier in April:
- Understand the terminology
- Do a payroll audit now
- Consider your overheads
- Pay reference period
- Communicate with your employees
The National Living Wage will be enforced in the same way as the National Minimum Wage and therefore, as penalties for non-compliance continue to increase, it is vital that employers get it right.
By Alan Price, Employment Law Director at Peninsula Business Services