Muras Matters: National Minimum Wage Increase

National Minimum Wage Increase

Echoing the changes recommended by the Low Pay Commission, the rates of National Minimum Wage (NMW) announced in March 2014 come into effect for pay periods starting on or after 1 October 2014. The changes are:

  • the main adult rate (for workers 21 and over) will increase by 19p to £6.50 an hour
  • the rate for 18 to 20 year olds will increase by 10p to £5.13 an hour
  • the rate for 16 to 17 year olds will increase by 7p to £3.79 an hour
  • the rate for apprentices will increase by 5p to £2.73 an hour

Most workers in the UK, over school leaving age, are legally entitled to be paid at least the NMW and all employers have to pay it if the individual is entitled to it. It makes no difference:

  • if the employee is paid weekly or monthly, by cheque, in cash or in another way
  • if the employee works full time, part time or any other working pattern
  • if the employee works at the business premises or elsewhere
  • what size the business is
  • where the business is in the UK

The penalties for employers failing to pay the NMW can include:

  • Payment of arrears to workers affected
  • Payment of a penalty to the Secretary of State amounting to up to 100% of the total underpayment subject to a maximum penalty of £20,000 per employee
  • Criminal Prosecution and stiffer penalties for the most serious cases

If you would like more information in connection with this please contact our Tax Director, Jenny Marks.