National Living Wage
3 February 2016
The newly named ‘National Living Wage’ is a topic which has grabbed headlines several times in recent months, but what actually is it and what does it mean for you?
The first thing to make clear is that, despite the extremely similar name, this is entirely separate to the ‘living wage’. The ‘living wage’ is a voluntary pay standard set by a campaigning group, The Living Wage Foundation. Accredited living wage employers currently have to pay £7.85 per hour (£9.15 in London) but these rates are being increased in April. The living wage rates are not legal requirements.
The ‘National Living Wage’ (NLW), on the other hand, is a legal requirement. Coming into force from 1 April 2016, it is essentially an additional tier of the National Minimum Wage and will apply to all workers who are aged 25 and above. The NLW has been initially set at £7.20 per hour.
The government has been increasingly robust in its enforcement of the National Minimum Wage, including ‘naming and shaming’ employers who fail to meet the legal minimums. It is therefore essential that your business complies with the rates prescribed by the NLW.
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