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A Quick Guide to the National Minimum and Living Wage

written by Business Beetle

If you are a business owner and you have working employees, you must comply with the National Minimum Wage and the National Living Wage rates. A recent article published by the government, named and shamed nearly 180 employers that have been underpaying their employees. Not only do employers need to backpay employees, but they are also subject to hefty fines from the government of up to 200% of arrears. Read on for everything you need to know in order to comply with the latest national minimum and living wage.

As of April 2018, the minimum wage rates that employers must pay are:

  • National Living Wage for employees aged 25 and over – £7.83 per hour
  • National Minimum Wage for employees aged 21 to 24 – £7.38 per hour
  • National Minimum Wage for employees aged 18 to 20 – £5.90 per hour
  • National Minimum Wage for employees aged under 18 – £4.20 per hour

Many small businesses also employ apprentices as not only does it give younger workers the opportunity to kick-start their careers, but it can also be a great cost saving option for small business owners who are beginning to take on employees for the first time. Apprentices are entitled to the following rates:

  • £3.70 per hour if the apprentice is under the age of 19, or if they are aged 19 or over and in the first year of their apprenticeship.
  • Apprentices who are aged 19 or over and have completed their first year of their apprenticeship are entitled to the National Minimum Wage for their age.

Whether you’re a small business or a large corporation, as a business owner you must comply with the law. If you’ve already got employees or you’re just starting to think about hiring, making sure that you are aware of the above rates means that not only are you being fair to your employees, but you’re not going to get into any legal trouble either. The government has cracked down in recent years and now publishes a yearly report which states all organisations that have failed to comply with the National Minimum and Living Wage. So don’t make any excuses, any employers that do not comply will be caught and subject to very heavy fines as well as paying back owed money to employees.

Rates are generally updated each year, so make sure that you keep yourself up to date. For any more advice on the National Minimum and Living Wage, visit www.gov.uk.

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