With the aim of paying more experienced workers a higher wage, the Government is introducing a premium for workers aged 25 and over, known as the National Living Wage. This will be over and above the National Minimum Wage, which will remain in place. The first premium (coming into force on 1 April 2016) will be set at 50p above the National Minimum wage, so that the National Living Wage will be £7.20.
From 1 April 2016, the financial penalty payable by employers who underpay the National Minimum Wage will be increased from 100% to 200% of the underpayment due to each worker.
As a reminder current National Minimum Wage rates are:
The standard adult rate (workers aged 21 and over) is £6.70.
The development rate (workers aged between 18 and 20) is £5.30.
The young workers rate (workers aged under 18 but above the compulsory school age who are not apprentices) is £3.87.
The rate for apprentices is £3.30.
What does this mean for employers?
Employers who pay close to the National Minimum Wage should check that they know which employees will be entitled to the National Living Wage, and ensure that they are ready to pay any required increase in salary from the 1st April 2016.