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National Minimum Wage Increases

With effect from 1 October, National Minimum Wage rates will be as follows (the rate which applied up to 30 September being stated in brackets):

Workers aged 21+: £6.70 (£6.50)

Workers aged 18 – 20: £5.30 (£5.13)

Workers aged 16 and 17: £3.87 (£3.79)

Apprentices: £3.30 (£2.73)

From 1 April 2016, the National Living Wage will be implemented for over 25s. This will initially be £7.20 per hour, but will increase to £9.00 by 2020.

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HMRC currently target for enforcement action high-risk areas for non-payment of the minimum wage: social care, hairdressing and retail. The Department of Business, Innovation and Skills (“BIS”) has now announced a series of measures aimed at stepping up enforcement.

The budget for enforcement is to be increased, and a new HMRC team is to be established which will be dedicated to pursuing the most serious cases.

Also, from an as yet unspecified date, a new penalty of disqualification from being a company director for up to 15 years is to be introduced; and financial penalties for non-payment will double to 200% of arrears (to be halved if paid within 14 days). The maximum penalty of £20,000 per worker will, however, remain in place.