National Living Wage

The National Living Wage came into force in April 2016 and there’s been several changes since. Are you and your business following the rules? Download our free guide – it’s packed full of useful information.

What is the National Living Wage?

The National Living Wage came into force in April 2016 and became compulsory for employers to meet the newly set hourly rate. Charities
and various other groups had been campaigning for a National Living Wage for a while. They believed there should be regulations in place to ensure a minimum hourly rate for employees which was high enough for a basic standard of living (affording food, transport and bills).

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What’s the difference between the Living Wage and the National Living Wage?

The Living Wage is an hourly rate which is calculated according to the basic cost of living in the UK. It’s set by the National Living Wage Foundation, updated annually and currently stands at £8.45 an hour outside of London, and £9.75 within London. The Living Wage differs from the National Living Wage because it is only a guide and it is up to employers to decide if they want to meet the amount or not. The National Living Wage is compulsory.

How much is the National Living Wage?

The National Living Wage applies to those aged 25 and over and is being introduced in stages. It is currently set at £7.50 an hour (as of April 2017).

Will this apply to all my employees?

No, but all employees under age 25 will see their rate of the National Minimum Wage increase from the first pay period on or after 1 April 2017 as follows:

AgeFrom (£)To £
21-24£6.95£7.05
18-20£5.55£5.60
16-17£4.00£4.05
Apprentices under 19 or 19+ in the first year of apprenticeship£3.40£3.50

 

Now you understand how much you’ll need to pay your employees, how are you going to prepare?

Talk to your employees

Nothing causes more trouble than lack of communication and misunderstanding. Make sure your employees are aware of the National Living Wage rates and how they affect various age groups.

Managing overtime

With wages rising you might find you’re not able to pay premium costs on things like overtime. It may be worth thinking about staggering shift start and finish times so you always have enough employees on duty, but avoid the added costs of overtime.

Get the best from your employees

It’s important to get the best from your workforce on every step of their employment journey. Now is a great time to revisit your performance management policies to ensure that you are aware of how individual employees are performing against pre-discussed targets. This will help you manage employee performance and more importantly, progression.

Redundancies

It’s something that no owner wants to consider, however, it is an issue that may have to be discussed. If redundancies are anticipated, it is important that your existing procedures and policies are examined. This is vital so that as an employer you are protected if you choose to investigate redundancy options.

Keep up to date with new legislation and ensure compliance during inspection

New legislation is continually emerging, so it’s important that you stay on top
of it. Make sure you have robust Health & Safety and HR policies in place to make regulatory inspections easier to manage. Citation’s online platform can help streamline your policies and save you time in doing so.

Want more information on the Living Wage?

The Living Wage Foundation is an organisation which has strongly campaigned for the National Living Wage and they are responsible for calculating the Living Wage according to the cost of living. They accredit employers who commit to paying the non-compulsory Living Wage.

Additional support from Citation

With over 20 years of experience, we understand the issues you’re worrying about. We can help you with all of your HR and Health & Safety issues, and as a Citation client you will have access to 24/7 expert advice and online tools which are designed to make your life much easier, while giving you confidence that you’ve got it all covered. Contact us for advice or call our friendly team on 0345 844 1111.

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