From the 1st October 2016, the National Minimum Wage will rise for workers under the age of 25. The changes, which are in line with the recommendations of the Low Pay Commission’s Report from earlier this year, will increase as follows:
– Workers between the ages of 21 and 24 – From £6.70 per hour to £6.95 per hour
– Workers between the ages of 18 and 20 – From £5.30 per hour to £5.55 per hour
– Workers between the ages of 16 and 17 – From £3.87 per hour to £4.00 per hour
– Apprentices – From £3.30 per hour to £3.40 per hour
The higher increase in the minimum wage for workers on the ‘adult rate’, meaning those aged between 21 and 24 is due to a “rapid recent improvement in unemployment rates” and pay growth faster than those aged 25 and above. However, the Low Pay Commission have not recommended that the Government extends the National Living Wage to all workers above the age of 21 rather than just those over 25 because, despite improvements, “unemployment rates for 21-24 year olds are twice as high as those for 25-30 year olds”. Therefore, significantly increasing the wages of this group could prevent further job growth.
Workers aged 25 and above will continue to receive the higher ‘National Living Wage’ which was introduced in April of this year and it will remain unchanged at £7.20. The Government’s target is to increase this higher rate to more than £9 per hour by 2020. However, this target had faced criticism following the Brexit vote, with concerns raised about its affordability in what may be a turbulent economic landscape. The British Chamber of Commerce (BCC) claimed the targets were “politically driven” and would hit smaller businesses hardest.
If you think you’re not being paid properly or have a wage that works out less than the minimum wage, contact us on 0330 221 0684 to book a free telephone consultation. Alternatively, email firstname.lastname@example.org and we’ll respond within 24 hours.
If you are a business owner and require advice on how these changes may affect you, please call us on 0330 221 0684
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