Business Consulting – National Minimum Wage Changes.

As we all know the national minimum wage is an hourly rate that an employee gets paid based upon their age and whether they are an apprentice or not.

But like every year an important change is coming next month, and you as an employer need to know all about it. As of the 1st April 2020, the national minimum wage and the national living wage rates are rising for all age bands, as well as apprentices.

We want you to feel prepared and ready in regards to these changes, so to make you feel more at ease our business consulting firm have outlined the basics to avoid any common errors when it comes to such legislation. We have even included a link to the minimum wage calculator just so you, as either an employer or employee can be sure you are paying or being payed the correct amount.

What Are The Changes For 2020?

AgeCurrent 2020Increase
Apprentice£3.90£4.15 + £0.25
Under 18£4.35£4.55+ £0.20
18-20£6.15£6.45+ £0.30
21- 24£7.70£8.20+ £0.50
25 +£8.21£8.72+ £0.51

The Most Common Errors

  • Failure to apply the increase from the 1st April each year
  • Missing birthdays and forgetting to increase the pay when they pass certain age brackets
  • Paying the apprentice rate to someone who is not actually an apprentice
  • Paying the apprentice rate for longer than their first year
  • Making deductions from wages for items that are often part of the job e.g. uniforms and tools
  • Not paying for all the time the employee has worked e.g. travelling time and training
  • Including elements that do not count towards National Minimum wage, such as tips.

Back To Basics

Apprentice Wage

  • Entitled to the apprentice wage if you are aged under 19 or you are 19+ in your first year of apprenticeship
  • An apprentice is entitled to national minimum wage if they are 19 and over having completed their first year of the apprenticeship

National Minimum Wage

  • Entitled to the national minimum wage if you are of school leaving age and above.
  • As well as being under the age of 24. 25’s and over are entitled to the national living wage.
  • This includes part time workers, laborers, agency workers and trainees
  • Those who are not entitled includes the likes of self-employed workers, company directors, volunteers, under school leaving age, and those on work experience and placements.

It’s a criminal offence for employers not to pay someone the National Minimum Wage or the National Living Wage, or even to fake payment records. HMRC have the right to carry out checks at any time and ask to see payment records. Don’t be caught out, make sure you have the right policies in place!

To Do List

  • Make sure you check your workers are being paid the correct national minimum wage
  • Identify the increases for April 2020 for each of your employees
  • Clarify your understanding on the gov.uk website
  • Ensure you are ready to make the necessary changes to your payroll arrangements.

Use the free minimum wage calculator on the gov.uk website to check if your workers are being paid correctly, or if you are receiving the correct amount of pay. Check it out here https://www.gov.uk/minimum-wage-calculator-employers. Get in touch with us today if any further help is required.