Don’t Forget – The National Living Wage and Minimum Wage go up in April 2021

National Living Wage and the Minimum Wage

As an employer, it’s important to keep a close eye on the National Living Wage and the Minimum Wage to avoid backlash and a potential criminal conviction. This might sound extreme but if you’re not staying on top of rule updates or, even worse, are faking payment records, then you’re committing an offence. So remember that the rules are changing in April 2021. Here’s a rundown of what to expect.

National Living Wage and Minimum Wage hourly rates increase to:

  • 25 and over – £8.91
  • 21 to 24 – £8.36
  • 18-20 – £6.56
  • Under 18 £4.62
  • Apprentices £4.30

Who is Entitled to the Raise?

Many workers are entitled to receive the raise. This includes part-time workers, casual labourers, agency workers, workers and homeworkers paid by the number of items they make, apprentices, trainees, workers on probation, disabled workers, agricultural workers, foreign workers, seafarers and offshore workers.

Who Might Not Be Entitled?

Some workers may not be entitled to the minimum National Living Wage or National Minimum Wage, including self-employed people running their own business, company directors, volunteers or voluntary workers, workers on a government employment programme, members of the armed forces, family members of the employer living in the employer’s home, non-family members living in the employer’s home who share in the work and leisure activities and are treated as one of the family, workers younger than school leaving age, higher and further education students on a work placement up to 1 year, workers on government pre-apprenticeships schemes, people on European Union programmes including Leonardo da Vinci, Erasmus+ and Comenius, share fishermen, prisoners and people living and working in a religious community.

Are the New Rates Advisory?

No! Where the rules apply, they’re compulsory so you should make sure all wages are raised accordingly and review your payroll whenever a new change is announced. This will help you stay on the right side of the law and keep your workforce satisfied. Staying above board will ensure you tick all boxes should HMRC make a payment record check.

HMRC states on their website:

“It’s a criminal offence for employers to not pay someone the National Minimum Wage or National Living Wage, or to fake payment records. Employers who discover they’ve paid a worker below the correct minimum wage must pay any arrears immediately. HMRC officers have the right to carry out checks at any time and ask to see payment records. They can also investigate employers if a worker complains to them. If HMRC finds that an employer has not been paying the correct rates, any arrears have to be paid back immediately. There will also be a fine and offenders might be named by the government. It’s the employer’s responsibility to keep records proving that they are paying the minimum wage – most employers use their payroll records as proof. All records have to be kept for 3 years.”

Don’t just presume you’re paying everyone correctly. Check and check again or seek professional payroll, tax and accounting assistance.