Minimum Wage increases on 1 April 2017

31 March 2017

 

National Minimum Wage

The National Minimum Wage (NMW) is the minimum pay per hour most workers are entitled to by law. The rates from 1 April 2017 are:

  • £7.05 per hour - 21-24 yrs old

  • £5.60 per hour - 18-20 yrs old

  • £4.05 per hour - 16-17 yrs old

  • £3.50 for apprentices under 19 or, 19 or over who are in the first year of apprenticeship.

 

The National Living Wage

The National Living Wage was introduced on 1 April 2016 for all working people aged 25 and over and on 1 April 2017 it will increase from £7.20 to £7.50 per hour.

 

Low-paid workers urged to check pay

HMRC and the Department for Business, Energy and Industrial Strategy (BEIS) are running a UK-wide campaign to encourage low-paid workers to check their pay to ensure they are getting the National Minimum Wage (NMW).

Employees can check their minimum wage rates here. They can also use an online calculator to identify what they are entitled to.

Workers who feel they are not getting paid the correct wage can also call the Acas helpline on 0300 123 1100. The line has a free translation service for more than 100 languages.

 

Financial penalty

A reminder to employers that the government increased the penalties imposed on employers that underpay their workers in breach of the minimum wage legislation from 100% to 200% of arrears owed to workers. The increased National Minimum Wage penalty came into effect on 1 April 2016. The penalty applies to any notice of underpayment relating to a pay reference period beginning on or after 1 April 2016. The maximum penalty is £20,000 per worker. The revised penalty is calculated as 200% of the total underpayment for all of the workers specified in a Notice of Underpayment relating to pay reference periods that commence on or after 1 April 2016. Where this amount would be less than £100, the minimum penalty of £100 should still be applied. Where this amount would be more than £20,000, the maximum penalty of £20,000 per worker should be applied. The penalty is reduced by 50% if the unpaid wages are paid within 14 days.

 

Naming and shaming

If HMRC investigates an employer that is breaking minimum wage law they will be issued with a Notice of Underpayment by HMRC. This is a formal notice that sets out the arrears of minimum wage to be repaid by the employer together with the penalty for non-compliance with the requirement to pay workers the minimum wage. An information sheet is given to the employer at the start of the investigation which sets out details about the BEIS naming scheme. The employer will have 28 days to appeal against the Notice of Underpayment issued by HMRC. If the employer does not appeal or an appeal has been unsuccessful HMRC will refer the employer to BEIS for automatic naming under the scheme.

Further details can be found in the policy document on National Minimum Wage and National Living Wage law enforcement.