As of 1 April 2016, the national living wage comes into effect which means that all workers aged 25 and over will be legally entitled to £7.20 per hour.
The compulsory living wage is in effect a top up for those who already receive the national minimum wage, which is currently £6.70 for those aged 21 and over. The government has indicated that this figure is set to increase each year in April, with the annual increase to the national minimum wage continuing to take place in October.
The right to the national minimum wage or national living wage can be enforced by HMRC compliance officers, or by a worker bringing a claim in the Employment Tribunal. If employers are found to have breached minimum wage law aside from repaying the money owed to the employees in question they can also be required to pay a penalty to the Secretary of State of 200% of the money owed up to £20,000. In addition to this company directors can be disqualified for up to 15 years and failure to pay the national living wage is also a criminal offence.
It is therefore very important that all employers comply minimum wage law, and if you have any questions about the impact of this legislative change upon your business, please do not hesitate to contact your Stephensons Workplace Plus adviser.