National Minimum Wage for 25 year olds

Young people at a festival

25 year old+ employees set to earn £4,485+ p.a. more by 2020!

A compulsory National Minimum Wage is due to be introduced in April 2016 for all working people aged 25 and over, and will be set at £7.20 per hour (2016).  It is indicated to rise to £9.00/hour by 2020.

Therefore, the lowest salary a 25 year old employee can earn for a 37.5 hour week would be:

Until April 2016         £13,065

April 2016                   £14,040

rising to

April 2020                   £17,550

National Minimum Wage 25 year olds

 

 

The National Minimum Wage (NMW) is the minimum pay per hour most workers are entitled to by law. The current National Minimum Wage for those under the age of 25 will continue to apply.

Apprenticeships and agricultural workers may have different rates.

 The NMW for 25 year olds will be introduced in stages

The first increase will be introduced in April 2016, when entitled workers will see their minimum wage per hour rise to £7.20 and this will steadily increase until 2020 when companies will be required to pay a minimum of £9.00 an hour for any employee who is 25 years old or over.  That compares favourably to the current £6.70 an hour (Oct 2015) minimum wage which applies to anyone over the age of 21.

 Non-payment of the NMW

It is against the law for employers to pay workers less than the National Minimum Wage or to falsify payment records.

If an employer doesn’t pay the correct rate, a worker should talk to their employer and try to resolve the issue informally first. If this doesn’t work a worker may make a formal grievance to their employer.

A worker can make a complaint to HMRC who will investigate the complaint. If HMRC find that an employer hasn’t paid at least the National Minimum Wage, they can send a notice of arrears plus a penalty for not paying the correct rate of pay to the worker.

 Small firms will get extra help

Businesses small and large will be helped to make the changes to wages.  These are likely to be:

  • Corporation tax is being cut by two per cent to 18 per cent in order to offset the predicted one per cent impact on corporate profits.
  • Extra help for small firms will come in the form of increasing the new Employment Allowance by 50 per cent to £3,000.

 

It is important to check which staff will be affected by the new NMW levels and ensure you are paying the correct amount.

Check which National Minimum Wage affects your workers?

You may also find the following articles useful:

New National Minimum Wage Rates

Why is the National Minimum Wage not a living wage? (Feb 2013)

For further help and advice regarding your employees’ rates of pay, contact us on 0117 9323444