New rates of the National Living Wage (NLW) and National Minimum Wage (NMW) came into force on 1 April 2022.
The NMW rates are as follows:-
• Age 23 or over (National Living Wage) £9.50
• Age 21 to 22 £9.18
• Aged 18 to 20 £6.83
• Under 18 £4.81
• Apprentice £4.81
An apprentice must be paid the apprentice rate if:
• they are under 19 years of age
• if they are 19 or over and in the first year of their current apprenticeship agreement
If they are over 19 and have completed the first year of their apprenticeship they are entitled to the minimum wage for their age.
Workers entitled to the NLW/NMW.
The NLW and NMW apply to workers who are full-time or part-time and, as well as apprentices, will include agency workers, casual workers, home workers, those on zero hours contracts and employees on probation.
Some of those not included are workers who are genuinely self-employed, volunteers and company directors.
Failure to pay the NLW or NMW
Diane Massey of Warrington solicitors DSM Legal Limited, says: “It is crucially important for employers to keep abreast of the NLW and NMW regulations which change every year in April. Failure to do so can lead to an employee making a claim to an employment tribunal or an anonymous report to the Inland Revenue, who will then carry out an investigation.”
HMRC can issue a fine and order an employer to pay any shortfall going back for a period of 6 years.
An employee can make a claim in the employment tribunal for unlawful deduction from wages going back 2 years.
Checking the correct amount of the NLW/NMW
There is a useful calculator on the Government website which can be used to calculate the correct amount of NLW/NMW which should be paid. www.gov.uk/am-i-getting-minimum-wage
Business continue to come under pressure due to the end of the furlough scheme, rising costs, particularly with oil and gas prices since the invasion of Ukraine and there is no doubt that the Country as a whole is facing a period of squeezed living standards which can be seen in increased prices for consumer goods and food.
Whilst businesses are doing their best to absorb the increase in costs so as not to pass them onto their customers, in most cases it is inevitable that increased costs will have to be passed on at some stage to ensure that businesses can continue to meet their legal obligations whilst ensuring that they remain profitable.
