Employers must gear up for April living wage deadline

The National Living Wage has been catching headlines since Chancellor George Osborne announced it last summer, but the Government’s target of £9 per hour by 2020 has overshadowed the detail, and many businesses remain unaware of the transitional deadlines and new penalties now in place.

The compulsory National Living Wage (NLW) arrives on 1 April 2016 for eligible workers aged 25 and over, and it’s been set at £7.20 per hour. But the NLW does not replace the current National Minimum Wage, it sits alongside and is a new premium tier solely for those aged over 25. For everyone under the age of 25, the National Minimum Wage continues to apply.

The new NLW is different also from the ‘Living Wage’, which is an hourly rate of pay calculated to cover the basic cost of living in the UK. It’s assessed by the independent action group Living Wage Foundation and most recently has been calculated at £8.25 per hour, or £9.40 per hour in London.

When the NLW arrives on 1st April 2016 all eligible employees – whether permanent workers, agency workers, casual labourers or agricultural workers – who are aged 25 or over must be paid at £7.20 per hour, a pay rise of 50p per hour, whilst other workers will continue to be entitled to the following rates:

  • 21-25 years old – £6.70 per hour
  • 18-20 years old – £5.30 per hour
  • Under 18 years old – £3.87 per hour
  • Apprentices – £3.30 per hour

Said Employment Law expert Jane Crosby of Hart Brown solicitors: Implementing the National Living Wage for eligible over 25’s is not something that should be ignored or delayed, as there are stiff penalties in place. Employers can be fined 200% of the amount owed if arrears are not paid within 14 days and receive fines of up to £20,000 per worker.”

She added: “It’s important to avoid any age-related practices that set out to reduce the number of employees eligible for the higher rate. Any dismissals of older employees, even with less than two years service, could see employers facing an employment tribunal for unfair dismissal and age discrimination. It’s the same for recruitment, employers must avoid demonstrating any preferences for younger workers.”

The National Living Wage is expected to increase each year, with recommendations for future rises being made by the Low Pay Commission as the Government continues its objective towards ‘higher pay and higher productivity’ in place of ‘low wage, high welfare’.

This is not legal advice; it is intended to provide information of general interest about current legal issues

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Jane Crosby

Partner, Dispute Resolution

Jane is an employment and commercial litigation solicitor of more than 15 years' experience. Prior to entering the legal profession, Jane was employed in the...

Partner, Dispute Resolution

Jane Crosby

Jane is an employment and commercial litigation solicitor of more than 15 years' experience.

Prior to entering the legal profession, Jane was employed in the aviation industry. This experience is appreciated by many of Jane's clients who note that she is able to take a commercial and pragmatic approach to any legal issue that they face.

Jane acts for a wide range of individuals and businesses and her areas of specialism include aviation, property related industries and IT. Jane regularly advises on aspects of employment law, such as settlement agreements, employment contracts, policies and procedures, redundancies, equal pay, data protection, issues arising from TUPE and reorganisations, the calculation of holiday pay, bonus and commission payments, disciplinary and grievance issues, dismissal and termination issues, the protection of confidential information and the enforcement of restrictive covenants. Jane gets involved in GDPR training for her clients and she is able to deliver tailored employment law training sessions upon request.

As a commercial litigation lawyer, Jane also deals in shareholder and directors disputes, commercial contract disputes and the enforcement of restrictive covenants.

Jane has been involved in successful high value commercial litigation for clients in the High Courts, she is an accredited mediator and she is a member of the Employment Lawyers Association.

Jane is often asked to write for a number of well known publications, including The Daily Mail, The Telegraph and The Week and she has been interviewed on BBC Radio 4.

Here is small selection of the feedback that Jane has received:

“Jane, I cannot sincerely thank you enough for your wise counsel and am delighted to have made your acquaintance. If I am blessed with a new position somewhere I will hand over my contract in the first instance to you. Likewise, any of my friends, peers, romans and countrymen wanting advice, I will point them in your direction.”

“Jane, you have been most resilient on my behalf for which I sincerely thank you for all your endeavours. I have a tremendous working relationship with Hart Brown and you have undoubtedly compounded this further."

“I appreciated the clarity of advice given at a stressful time”.

“A sensitive and highly professional approach and efficient work in the interests of the client”.

“Your advice, conduct and assistance have been indeed outstanding and very professional but also – and most importantly – very humane”.

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Hart Brown Solicitors is the trading name of Hart Brown LLP registered in England and Wales No. OC 425835 whose registered office is Resolution House, Riverview, Walnut Tree Close, Guildford, GU1 4UX and is authorised and regulated by the Solicitors Regulation Authority (SRA) No. 658593. Members: N Maud, T Pearce, D Knapp, R Campbell and P Grimwood, Partners: J Crosby, L Harrhy, J Jupp, J Lamont, T Mandelli, V McMurtrie, E Moore, S Osborne, S Powell and G Sanders.

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