In 2016, a new band was added to the National Minimum Wage (NMW) for workers aged 25 or over. This is called the National Living Wage (NLW). Like, the NMW, the NLW is regulated by the government and as an employer you have a legal requirement to pay your staff the correct amount. The law applies to all businesses, regardless of size and HMRC can take employers to court who do not pay the National Living Wage, so you must get this right.
How much is the National Living Wage?
The NLW applies to all eligible workers aged 25 and over and like the NMW, rates are increased regularly inline with inflation. Assuming an employee is entitled to the NLW, the following rates apply:
|April 2020 (current rate)||April 2019 – March 2020|
The National Living Wage v The Living Wage
Somewhat confusingly, you will come across both of these terms as an employer. Essentially, what you need to know is this… The National Living Wage is a statutory requirement, set by the government, that you must pay entitled workers, by law.
The Living Wage, on the other hand, is a suggested level, set by The Living Wage Foundation. It is a based on the basic cost of living in the UK and is usually higher than the National Living Wage. Employers can choose to pay The Living Wage on a voluntary basis.
Your responsibilities as an employer
As an employer, it is essential that you keep up-to-date with current legislation and minimum levels of pay that apply to all of your staff. Calculating payments can be complicated, and some of the rules confusing. And since it’s a criminal offence to not pay an entitled worker the National Living Wage, getting it right is important.
If you find the whole process a headache and would rather spend your time building your business, why not outsource your payroll? At Dental HR we offer a range of payroll services that make the process simple and give you one less thing to worry about.