New National Living Wage rate
The new National Living Wage rate comes into force from 1 April 2016.
Employers will be required to pay all employees aged over 25 an hourly rate of pay of at least £7.20 and is intended to rise to exceed £9 an hour by 2020.
The Government believes the introduction of the National Living Wage will boost the pay of over one million low paid workers. Employers will need to ensure they are compliant with their obligations and ensure they are paying the minimum rates of pay required not only following the introduction of the National Living Wage, but also in respect of the National Minimum Wage which applies to those aged under 25. We have seen the Government “name and shame “ employers where they have not been compliant with the National Minimum Wage legislation and expect a similar approach to be taken where it is found that employers have not been paying the National Living Wage.
With the introduction of the National Living Wage, the penalty for non-payment will be up to 200% of the amount owed, unless the arrears are paid within 14 days.
Furthermore, the maximum fine for non-payment will be £20,000 per worker and employers who fail to pay the National Living Wage will be banned from being a company director for up to 15 years.
For further guidance regarding the National Living Wage, please do not hesitate in contacting Nick Bustin, Director of Employment Taxes or your usual haysmacintyre contact.
Director of Employment Tax
20 7969 5578