The Living Wage. Is Your Payroll Ready?
The National Living Wage came into effect on April 1st 2016 at a rate of £7.20 per hour for those aged 25 and over. Quite apart from the penalties of non-compliance (and there is likely to be naming and shaming for those who don’t comply along with fines, just as with the minimum wage), we know that when it comes to implementation into payroll, there will be plenty of questions from companies wanting to make sure they get everything right.
As specialists in outsourced Payroll Services, here are just a couple of the more common questions that we’re being asked by our clients about the national living wage – along with the answers to help you along the way.
Q. When turning 25, is a worker entitled to be paid the living wage rate from the date of his or her birthday, or from the start of the next pay period?
The answer is from the start of the next pay period, as required by the new legislation. In other words, the national living wage rate must be paid from the start of the first pay period that begins on or after the worker’s 25th birthday.
Thus if an employee becomes 25 on 23rd June and the company’s pay period begins on the 1st day of each month, then that employee will be entitled to the national living wage rate from 1st July, and not from 1st June or from 23rd June.
Q. What about apprentices? If they are aged 25 or over, do they receive the national living wage?
There is a separate national minimum wage rate for apprentices who are either aged under 19 or in the first 12 months of their apprenticeship, regardless of their age. Apprentices aged at least 19 but under 25, who are not in the first 12 months of their apprenticeship will receive the national minimum wage appropriate for their age. Only apprentices aged 25 or over who are not in the first 12 months of their apprenticeship will receive the national living wage.
Contact us for Payroll Help and Advice on the National Living Wage
These are just two of the questions we are getting asked by our clients about the new living wage, especially amongst smaller businesses who do not have a separate HR or Payroll FunCtion.
We are a fully resourced and compliant outsourced payroll services provider. We know all the fine details of the national living wage legislation and will guarantee to get everything right for you so that you can get on with running your business.
If you need help with your payroll, contact us or call us on 0121 422 0550 for a free initial chat.