On April 1st 2021, the National Minimum Wage (NMW) rates for workers changed.
Employers are now required to pay their workers aged 23 and over the National Living Wage, while those 23 and under, as well as apprentices, must be paid at least the National Minimum Wage.
These changes have been welcomed by workers of all ages and it’s important that all employers, operating across all industries, are up to date and aware of the national minimum wage changes.
So what does this mean for your business?
What is the National Minimum Wage?
The National Minimum Wage (NMW) is the minimum pay per hour that most workers must be paid. It is a legal requirement.
The rate your workers are entitled to depends on:
- Their age
- Whether they are an apprentice
Who is entitled to the National Living Wage?
Almost all workers of school leaving age are entitled to the NMW. That includes:
- Part time workers
- Temporary workers
- Casual workers
How much has minimum wage increased by?
The National Minimum Wage has increased from £8.72 to £8.91 per hour, the National Living Wage. This applies to all workers aged 23 and over.
Here’s how the changes have affected the other age bands:
|Wage Band||New rate (from 1 April 2021)|
|Age 23 and over (National Living Wage)||£8.91|
|Age 21 – 22||£8.36|
|Age 18 – 20||£6.56|
But what does this mean for furloughed workers?
Although there is certainly light at the end of the tunnel when it comes to returning to some sense of normality in the world, there are still a number of workers on furlough in the UK – the Government’s Coronavirus Job Retention Scheme.
And, all furloughed workers are still entitled to receive the new national minimum wage increases and must get their usual pay in full, for any holiday they take.
What happens if you haven’t been paying at least the NMW?
It is a criminal offence for employers not to pay someone the NMW. With this in mind, it’s important that you always keep up to date with any changes to the NMW.
But what happens if you realise that you haven’t been paying enough?
If you haven’t been paying enough, you must pay back what you owe your employees straight away and ensure that your payroll is compliant with the new rules.
Why choose React Accountancy?
Here at React Accountancy, we provide trusted accountancy services to start-up, established and multi-national businesses across a diverse range of industries.
From the moment you get in touch, our approachable, friendly and professional team will go above and beyond to ensure that you receive the right advice, support and accountancy solutions for your business.
Get in touch today for further information about any of our services.
You can reach us on 01914324110 or contact us via email using email@example.com