It’s time to update those pay slips for the annual review of Statutory Pay! This year, bolstered by politicians’ promises from the 2015 general election, the minimum amounts that employers must pay their staff have really jumped. The government has heeded advice from the Low Pay Commission, increasing the Minimum Wage by 20p – from £6.50 to £6.70. And they surpassed the 7p recommended increase for Apprentices, instead increasing their hourly rate by 57p – to £3.30 per hour. The new rates are effective from 1 October 2015.
So what do the updates mean to you and your business? What do you have to do about them?
The National Minimum Wage (NMW) is the lowest hourly rate you can pay an employee under the relevant age bracket and Apprentice status. It’s different from the Living Wage, which recommends wage rates that will allow workers to live comfortably – calculated on the basic cost of living in the UK. Failure to pay the NMW can lead to sanctions. More recently a tactic of the government has been to name and shame uncompliant businesses! Enough to tarnish any employer’s reputation.
The NMW represents some sort of safety net for workers. Paying employees well not only ensures their welfare and comfort, but is also a key motivator. 75% of employees have reported increases in work quality as a result of increased wages. So now might be the time to not only review the pay of those on the NMW, but also others throughout the organisation.
Payroll can be complicated. If you’d like to talk about how you can implement the new Minimum Wage updates please do get in touch. Our HR Dept Payroll service is also on hand to manage your payroll obligations for you. Find out more about what we can provide for you here.
On a final note…
National Living Wage to become compulsory
You may have heard from Mr Osborne’s Summer Budget that the UK government are introducing a compulsory Minimum Wage premium of £7.20 for all staff over the age of 25 as of April 2016. This rate is predicted to rise to £9 by 2020. Aside from the obvious benefits to employee welfare on the business, many are concerned about the affordability of this new legislation. Let us know your thoughts in the comments section below.