Chancellor Philip Hammond confirmed in his budget speech that the government would accept the new rates recommended by the Low Pay Commission.
Over 2 million people are expected to benefit. For a full-time worker, it represents a pay rise of over £600 a year.
The National Minimum Wage will also increase as follows:
21- 24 years – £7.38 per hour
18 – 20 years – £5.90 per hour
16 and 17 years – £4.20 per hour
Apprentices – £3.70 per hour
It’s a criminal offence for employers to not pay someone the National Minimum Wage or National Living Wage, or to fake payment records.
Employers who fail to pay the minimum rates face penalties of 200% of the amount owed, unless the arrears are paid within 14 days. Offenders also risk being named by the government.
The maximum fine for non-payment of the minimum rates is £20,000 per worker. Employers who fail to pay can be banned from being a company director for up to 15 years.
HM Revenue and Customs officers have the right to carry out checks at any time and ask to see payment records. They can also investigate employers if a worker complains to them.
It’s the employer’s responsibility to keep records proving that they are paying the minimum wage – most employers use their payroll records as proof. All records must be kept for 3 years.
For further advice on any of the issues raised in this article, or for employment law advice more generally, please contact JPP Law on 020 3468 3064 or email [email protected]
