Make sure your Payroll is up to date when the National Minimum Wage Rates increase for all wage bands and Apprentices on 1st October 2016.
The new National Minimum Wage rates are:
Wage Band Current Rate New Rate
21-24 year olds £6.70 £6.95
18 – 20 year olds £5.30 £5.55
16 – 17 year olds £3.87 £4.00
Apprentices* £3.30 £3.40
(*This apprentice rate is for those apprentices aged 16 to 18 and those aged 19 or over who are in their first year. All other apprentices are entitled to the National Minimum Wage for their age.)
The National Living Wage which is for ALL adults aged 25 or over is currently £7.20 per hour and does not change until 1st April 2017.
HMRC can and will fine firms for non-compliance
It is a legal requirement to pay all qualifying workers the National Minimum Wage, and HMRC will take action if the law is not adhered to:
“Employers who don’t pay National Minimum Wage rates are liable to a 200% penalty of the arrears amount. HMRC has investigated more than 70,000 employers and last year identified £10.3 million in arrears for workers.”
In our experience, ignorance is not a defence. HMRC expect payroll systems to be updated and fully compliant with the legislation.
We can help update and run your Payroll System
As an outsourced payroll provider, we managed many businesses’ payrolls, especially small businesses who perhaps don’t have the time or the in-house resource to do so themselves efficiently and effectively.
We know who is entitled and who isn’t entitled to the National Minimum Wage. Those entitled must be at least school leaving age (determined by the last Friday in June of the school year they turn 16 in) to get the National Minimum Wage, including:
- part-time workers
- casual labourers, e.g. someone hired for one day
- agency workers
- workers and homeworkers paid by the number of items they make
- trainees, workers on probation
- disabled workers
- agricultural workers
- foreign workers
- offshore workers
Some workers are not entitled to the National Minimum Wage. These include:
- self-employed people running their own business
- company directors
- volunteers or voluntary workers
- workers on a government employment programme, eg the Work 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, are treated as one of the family and aren’t charged for meals or accommodation, eg au pairs
- workers younger than school leaving age (usually 16)
- higher and further education students on a work placement up to 1 year
- workers on government pre-apprenticeships schemes
- people on the following European Union programmes: Leonardo da Vinci, Youth in Action, Erasmus, Comenius
- people working on a Jobcentre Plus Work trial for 6 weeks
- share fishermen
- people living and working in a religious community
In addition, the National Minimum wage does not apply to those in work experience, doing voluntary work or working as an intern.
Contact us if you are interested in Outsourcing your Company’s Payroll
The National Minimum Wage legislation is just one of many things that you need to keep up to speed with when it comes to your Payroll. If you’re thinking about outsourcing your payroll to free up more time to run your business, we can help. Contact us or call us on 0121 422 0550 for an initial chat. We would be delighted to hear from you.