National Living Wage came into effect 1st April 2016, make sure you are compliant!

2016-04-04 Jennifer Renney-Butland posted:

The Government's National Living Wage came into effect on 1st April 2016 for all working people aged 25 and over

The National Living Wage is set at £7.20 per hour and the government aims to raise it to over £9.00 by 2020. National Living Wage (NLW) should not be confused with the National Minimum Wage which still applies to workers aged below 25 and this applies to both part-time and full-time workers.

Who will be entitled to the National Living Wage?

Generally all those who are covered by the National Minimum Wage, and are 25 years old and over, will be covered by the National Living Wage these include:

  • employees
  • most workers and agency workers
  • casual labourers
  • agricultural workers
  • apprentices who are aged 25 and over and who have completed their first year of apprenticeship.

National Minimum Wage rates 2015/16

AgeMinimum rate
Over 25 (NLW)£7.20 an hour

Source: DWP

What penalties will employers face if they don't pay the NLW?

It is a criminal offence for employers to pay workers less than the National Living Wage or National Minimum Wage or to falsify payment records. A new enforcement team has been set up at HM Revenue and Customs to pursue criminal prosecutions, and fines of up to £20,000 per worker can be imposed on the employer.

The employee is likely to be awarded twice the amount owed in underpaid wages, in addition to which Company directors can face disqualification for up to 15 years.

If you have any questions about how this might impact on you or your business, please feel free to contact us at 01225 632240 or email us at

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