As tax year end approaches it is time for the yearly National Minimum Wage rate changes. These are rates that are reviewed on an annual basis by the government & employers must pay their employees at least these rates. Get your business ready for these changes which take effect from 6th April 2018.
*Apprentices aged 19 & over in their 2nd year onwards of their apprenticeship are paid the minimum wage for their age
The Difference between the National Minimum Wage (NMW) and the National Living Wage (NLW)
The National Minimum Wage applies to anyone aged over the school leaving age up to 24 years old. Employee’s aged 25 and over must be paid the National Living Wage rate, which is the top tier mandatory rate of £7.83 per hour from April 6th 2018.
Prior to 2016, the National Minimum Wage applied to all age groups, however, changes in the National Minimum Wage Regulations 2015 rebranded the National Minimum Wage for workers aged 25 and over to the National Living Wage (NLW). The first NLW rate was £7.20 per hour so from April 6th 2018, all employees aged 25 and over will see a pay increase £0.63 per hour to their usual pay rate.
The government’s target forecast is to reach 60% of median UK earnings by 2020 by which time it should have reached £9 per hour for employees aged 25 and over.
Is there a higher Minimum Wage rate for London in 2018?
It’s widely known that there is a higher cost of living in any London borough, however, there are no plans to introduce a higher Living Wage for London and surrounding areas. The National Minimum Wage rates shown above are applicable to all London Businesses.
What about the Real Living Wage?
The Real Living Wage is not covered by The National Minimum Wage (Amendment) Regulations 2017. It is a voluntary scheme any business can sign up for who can afford to pay their staff a higher wage to account with the higher cost of living. The Real Living Wage scheme is operated by the Living Wage Foundation. At the time of writing, there are 4,191 accredited living wage employers, each of which have pledged to pay the Real Living Wage rates. Those rates for 2018 are £10.20 per hour for accredited London employers and £8.75 per hour for all other enrolled employers across the rest of the UK.
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