National Minimum Wage: what retail businesses need to know
From 1 October, the National Minimum Wage (NMW) hourly rates for workers aged under 25 have increased as follows:
From 1 October, the National Minimum Wage (NMW) hourly rates for workers aged under 25 have increased as follows:
Age 21-24 | Age 18-20 | Age 16-17 | Apprentices | |
---|---|---|---|---|
Previous rate | £6.70 | £5.30 | £3.87 | £3.30 |
New rate | £6.95 | £5.55 | £4.00 | £3.40 |
This does not affect the minimum rate for workers aged 25 and over (the National Living Wage) which remains at £7.20 per hour (but will rise in April 2017).
Meeting NMW requirements is increasingly a key reputation management and corporate governance issue, as well as essential employment law compliance. The recent Sports Direct controversy and HMRC's practice of naming and shaming non-compliant employers highlight the potential reputational damage.
To calculate whether a worker has received the correct minimum hourly rate, their pay is averaged out over the worker's normal pay period (usually a month, unless the worker is paid more frequently). Businesses and their payroll providers must be on top of the detailed rules, including what deductions could result in non-compliance and what payments and allowances are included.
Some key issues for retailer and leisure businesses:
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