Compulsory National Living Wage to be introduced in April 2016

National Minimum Wage and the National Living Wage

The National Minimum Wage (NMW) is the minimum pay per hour most workers are entitled to by law. This rate will depend on a worker’s age and if they are an apprentice. Any changes to the rates are normally introduced in October each year.

The rates in use until 31 March 2016 were:

Introduction of the National Living Wage

From 1st April 2016, the government has introduced a new compulsory National Living Wage (NLW) for workers aged 25 and above. This has initially been set at £7.20 per hour; a rise of 50p relative to the current NMW rate. Please note that the National Living Wage is different from the Living Wage which can be operated on a voluntary basis.

The Low Pay Commission (LPC) will recommend future rises, with the Government aiming for it to reach £9 per hour by 2020.

The Office for Budget Responsibility has estimated that the cost to businesses will amount to 1% of profits. To offset the cost, the Government is cutting Corporation Tax and businesses will still benefit from a cut in their National Insurance contributions. From April 2016, the Government’s Employment Allowance has been increased by 50% to £3,000 per annum.

More information about the National Living Wage can be found on the Government’s website.

Key Points to note

Contact us

For more information about the National Living Wage please email enquiries@hghyork.co.uk or call 01904 655202.