InsightsInsight - Regulatory Services - POSTED: December 18 2015
Draft National Minimum Wage amendment regulations published
Draft National Minimum Wage (NMW) amendment regulations published and are due to come into force on 1 April 2016.
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The amended Regulations add the National Living Wage (NLW) rate of £7.20 an hour for workers aged 25. In the July 2015 Budget, the government announced it would introduce the NLW at a premium of 50 pence above the NMW rate, to take effect from April 2016. A further amendment increases the financial penalty payable by employers who underpay the NMW from 100% to 200% of the underpayment due to each worker.
The Regulatory Policy Committee has indicated that the introduction of the NLW will cost private-sector employers £1.1 billion. This total is made up of the direct cost to employers of £700 million from raising pay to meet the NLW and £137.5 million in non-wage labour costs such as pension and National Insurance Contributions. A further increase is planned to more than £9 an hour by 2020.
This content is correct at time of publication
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