Increases announced for the National Living Wage and the National Minimum Wage
A decision has been taken to introduce changes to the National Minimum Wage (NMW) rates from 1 April 2017 to coincide with the National Living Wage (NLW) rate which was introduced earlier this year. Thereafter, rate changes will be 1 April each year.
The Government thinking is to create a society where work pays and ‘reduces reliance on the state topping up wages through the benefits system* With this in mind the Government wished to see a higher wage for more experienced workers and so brought in the NLW. The Government’s objective is to have a NLW of over £9 by 2020.
The new increased rates were announced in the Chancellor’s Autumn Statement and are as follows:
National Living Wage figures from 1 April 2017
For workers aged 25 and over, the NLW will increase from £7.20 to £7.50 per hour. (This is an increase of over 4% but less than expected if the Government is to reach its 2020 objective.)
National Minimum Wage figures from 1 April 2017
- Standard (adult) rate for workers aged 21 to 24 will increase from £6.95 to £7.05 per hour
- Development rate for workers aged 18 to 20 will increase from £5.55 to £5.60 per hour
- Young workers rate for those aged 16 and 17 will increase from £4.00 to £4.05 per hour
- Apprenticeship rate will increase from £3.40 to £3.50 per hour (this rate applies to apprentices under 19 years of age or those aged 19 and over but in the first year of their apprenticeship).
Daily accommodation offset
Also, the daily accommodation offset will increase from £6.00 to £6.40 per day. The offset is the maximum daily sum that employers who provide accommodation for workers can deduct towards those costs.
To crack down on employers who do not pay the NLW and NMW, thus breaking the law, the government has announced a spend of £4.3 million. This will also include helping small businesses to understand the rules regarding NLW and NMW.
*Source: https://www.gov.uk/government/publications/national-living-wage-nlw/national-living-wage-nlw
More information on the National Living Wage, please check out QView.
QView, for those who may not be aware, is a publication brought to you by our Quest HR and health and safety specialists. It is a topical but often confusing HR topic which is then broken down and discussed by our panel who then offer a view from Quest. Over the course of the year we have amassed many QView issues on a variety of subjects; Pension Auto-Enrolment, Zero Hours Contracts and Pre-Employment Checks to name a few.
We are always happy to have feedback and would welcome any comments you may have. Maybe there is a topic that you would like discussed – if so let us know and we will do our best to accommodate you.
Please visit our QView index and download as many as you wish We also have a guide to National Minimum Wage and National Living Wage
