National Minimum Wage rates increase – National Living Wage also on the way

The National Minimum Wage increased on 1st October 2015 as the government followed the recommendations of the Low Pay Commission. The increases from the current rate are as follows:

The national minimum wage has increased by 20p an hour, from £6.50, to £6.70

Apprentices now earn an extra 7p an hour, taking their wages from £2.73, to £2.80. This covers apprentices who are under 19, or 19 and over and in the first year of their apprenticeship.

There has been an increase of 27 pence in the accommodation offset to £5.35. The offset is the one benefit-in-kind that can count towards the minimum wage. This is the maximum daily sum employers who provide accommodation can deduct towards those costs.

A compulsory National Living Wage will be introduced in April 2016 for all working people aged 25 and over, and this will be set at £7.20 per hour. The Low Pay Commission will recommend any future rises to the National Living Wage rate.

A series of measures have recently been introduced to crack down on employers that break National Minimum Wage law. As well as being publicly named and shamed, those that fail to pay their workers the National Minimum Wage also face heavy new financial penalties.

The BWF’s employment, legal and tax guidance is one of the most developed areas of our support for woodworking companies. BWF members needing advice on tax and employment matters can use our free-to-members business support helplines which includes legal assistance from Wedlake Bell, and employment advice from Croner. They can find further resources in this area under publications, where we have a number of guides and template documents.