Increase in National Minimum Wage from April 2020 – what do you need to do?
As announced on 31 December 2019, the National Minimum wage will be increased as below:
- Workers aged 25 and over £8.72ph (from £8.21)
- Workers aged 21-24 £8.20ph (from £7.70)
- Workers aged 18-20 £6.45ph (from £6.15)
- Workers over compulsory school age but not yet 18 £4.55ph (from £4.35)
- Apprentice rates £4.15ph (from £3.90)
Estimates suggest these increases will result in a pay rise for almost 3 million UK workers and that a full-time employee could benefit from an increase of up to £930 a year.
You will need to work with your payroll provider to ensure the new rates are reflected in staff salaries, starting rom the relevant pay period. It is important that you get this right as unintentional errors could result in claims for unlawful deductions of wages. Therefore, as NMW rates have clearly defined age boundaries, it is imperative that you check information on your employee’s date(s) of birth ahead of time to ensure this is correct. It is good practice for employers to put salary increase information in writing to the employee.
And of course you will need to make provision for the increase in National Insurance and pension contributions caused by any salary increases.
KM Business Solutions Ltd provide a Payroll Bureau service which will help you deal with changes as above. Please contact us for more information, through our website or by telephone.