The increase in the national minimum wage was announced on 14 March 2016. The annual increases in minimum wage usually take effect on 1 October each year. The increases take into account the findings of the Low Pay Commission. Unlike last year when the Government went beyond the suggestions made by the Commission in some areas, this year the Government has fully accepted its recommendations.
The new rates are detailed below (please note this does not include the National Living Wage for workers aged 25 and over).
|
|
Current Rate |
New Rate |
Increase |
|
21 - 24 year olds |
£6.70 |
£6.95 |
25p |
|
18 - 20 year olds |
£5.30 |
£5.55 |
25p |
|
Young Workers' Rate* |
£3.87 |
£4.00 |
13p |
|
Apprentices** |
£3.30 |
£3.40 |
10p |
*The young workers' rate applies to workers aged under 18 but above compulsory school age that are not apprentices.
**The apprentice rate applies to apprentices who are ages 16-18, or apprentices who are aged 19 and over and in the first year of their apprenticeship. After the first year, apprentices are entitled to the national minimum wage for their respective age groups.
The new living wage for workers of 25 years and over which came into force on 1 April 2016 at a rate of £7.20 per hour will not change in October. It has also been announced that from 2017 both the national living wage and the national minimum wage will be updated in April each year.
The national minimum wage was introduced in 1999 by the National Minimum Wage Act 1998. This specified a minimum hourly rate of pay to which most workers are entitled. All employers are obliged to pay the national minimum wage, regardless of their size or circumstances.
The content of this webpage is for information only and is not intended to be construed as legal advice and should not be treated as a substitute for specific advice. Morton Fraser LLP accepts no responsibility for the content of any third party website to which this webpage refers. Morton Fraser LLP is authorised and regulated by the Financial Conduct Authority.
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