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Budget 2015 Minimum Wage Rates Update

View profile for Katee Dias
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Following the Budget last Wednesday, talk has turned to the minimum amounts that should be paid to workers over the age of 16.

As you will know, at least the national minimum wage must be paid.

Current rates (per hour) are:

 

Until 30 September 2015

From 1 October 2015

For those aged 21 and over:

£6.50

£6.70

For those aged between 18 – 20:

£5.13

£5.30

For those aged 16 or 17:

£3.79

£3.87

Apprentices (if under 19 or in 1st year of apprenticeship)

£2.73

£3.30

From April 2016, an additional layer will be added for workers aged 25 and over as a new “national living wage” will apply to them as follows:

 

From April 2016

 

2017 to 2019

By 2020

New National Living Wage (for those aged 25 and over)

£7.20

Unknown as yet – Low Pay Commission asked for recommendation of rates

£9.00

Managers and HR professionals will be used to handling the annual national minimum wage increase each year but now will also need to:

  • Budget for the future 70p per hour rise for those aged 25 and over. Whilst this might not sound much, it should be remembered that for an employee who, say, works 8.5 hours, 5 days a week, this would be more than an extra £1,500 each year;
  • Remember that you should not base recruitment decisions on age. To do so could result in a discrimination claim;
  • Prepare for the future increases in hourly rates, noting that it is both October and April that will be the key review points; and
  • Remember that a different wage rate will apply to those who turn 25 years old on or after April 2016.

Goodman Derrick LLP has acted for clients in the hospitality and leisure industry for many years and the Employment Department recognises that this sector is heavily reliant on its staff. If you have any queries regarding the above or need assistance with any employment law issue, please contact Katee Dias, who is a member of our specialist Hospitality and Leisure Sector Group, on 020 7404 0606 or at kdias@gdlaw.co.uk.

This guide is for general information and interest only and should not be relied upon as providing specific legal advice. Information correct as at 10 July 2015.