The National Minimum Wage (NMW) is the minimum pay per hour most workers are entitled to by law. The rate will depend on a worker’s age and if they are an apprentice. The Low Pay Commission (LPC) was established as an independent body as a result of the National Minimum Wage Act 1998 to advise the Government on the National Minimum Wage.
A national minimum wage has been law in the UK since 1999, when the adult hourly rate was originally set at £3.60. Since 1998 the government has increased the National Minimum Wage annually and has announced increases again, to take effect from 1st October 2016, although future changes to the national minimum wage and the national living wage will take place at the same time in April each year, from April 2017 onwards. All workers, except those who are genuinely self-employed, are entitled to receive the National Minimum Wage or the National Living Wage.
The new National Living Wage for workers aged 25 or over of £7.20 has been statutory since 1st April 2016 and although no increase has been announced for October 2016, the government anticipates this rate to rise to £9 by 2020.
The new rates from 1st October 2016 are as follows:
|Age||Hourly Rate from April 2016||Hourly Rate from 1st October 2016|
|Workers aged 25 and over(NLW)||£7.20||£7.20|
|Workers aged 21 and over||£6.70||£6.95|
|Workers aged 18-20||£5.30||£5.55|
|Workers aged 16-17||£3.87||£4.00|
|Apprentices under 19, or over 19 and
in the first year of apprenticeship
If we can help you with this or any other HR issue, please do not hesitate to contact a member of our HR Team at HR Services Scotland Ltd on 0800 652 2610.