National Living Wage
Labour & European Law Review Weekly Issue 464 06 April 2016
Coinciding with the introduction of the National Living Wage (NLW) last week, the government has published guidance on how to calculate the new National Minimum Wage (NMW).
The NLW, applies from 1 April 2016. The rate has been set at £7.20 per hour and covers employees over 25, most workers (including agency workers) over 25 as well as casual labourers and apprentices over the age of 25. Different minimum wage rates apply to people under 25 years of age depending upon the age of the person.
HM Revenue & Customs enforces the minimum wage and can carry out inspections of employers at any time, without giving a reason for doing so. The penalty for non-payment of the NMW is 200 per cent of the amount owed, unless the employer pays the arrears within 14 days in which case it is reduced by 50 per cent. The maximum fine for non-payment is £20,000 per worker.
According to a survey carried out by the government at the end of last year, only about 62 per cent of workers entitled to the NMW check their payslip to ensure they are being paid the correct amount. Of those surveyed, 5 per cent said that they did not get a payslip. However, when asked how likely they were to speak to their employer if their pay was not increased to the rate of the NLW at the beginning of April, 80 per cent said they were likely or very likely to do so.
If someone suspects that a worker is being paid less than the NLW or the NMW to which they are entitled, they can call the Acas Helpline on 0300 123 1100. Workers can bring a tribunal claim or make a claim in a civil court to recover any money they think they are owed as a result of not receiving the NMW or the NLW.
It should be noted that the new National Living Wage is different from the Living Wage, which is calculated by the Living Wage Foundation on the basis of the cost of living in the UK. It has no legal basis and it is therefore up to employers to choose whether to pay it or not.
Gerard Airey from Thompsons Solicitors commented: “If people have concerns that they aren’t being paid the National Minimum Wage then this guidance is a really useful starting point to see whether or not there may be an issue. It may appear to be a straightforward, but it is often quite complicated, so advice should be sought if members feel there may be an issue after consulting this guide.”
To read the survey details, go to: https://www.gov.uk/government/publications/national-living-wage-employee-survey-on-being-paid-correct-wages
To read the guidance in full, go to: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/513221/BIS-16-144-nmw-calculating-the-national-minimum-wage.pdf