Changes to National Minimum Wage - October 2016

With all the latest goings on in the UK political scene and having had to get your head around the introduction of the National Living Wage earlier this year, you can almost be forgiven for forgetting the increase in the National Minimum Wage which has come in to force this month. We say “almost”, as if you have forgotten about it and haven’t increased your affected employees’ salaries accordingly, you could easily find yourself in hot water with the HM Revenue & Customs.

Just as a very quick recap, the National Living Wage applies to workers aged 25 and over, whilst the National Minimum Wage is still applicable for employees under the age of 25. As of October 1st this year, the relevant rates of pay are summarised below:

Worker Age Hourly Rate of Pay
25 and Over £7.20
21-24 £6.95
18-20 £5.55
16-17 £4.00
Apprentices under 19, 0r over 19 in their first year of apprenticeship £3.40


We have previously looked in some depth at the concerns some UK businesses have over the introduction of the National Living Wage and the annual increases of the National Minimum Wage, but in our own experience, our clients have specifically shown concern about how pay differentials are being narrowed creating a sort of concertina effect: for example between “factory floor” workers aged 25 and over, and those in higher job roles, including line managers and team leaders. We have been working closely with them to ensure that not only are they complying on the legislative side of things, but taking a more in depth look at team structures, job evaluation, levels of pay and performance to ensure that they can retain a good balance within their overall pay structures.

Drop us a line if you would like Park City to help you with any employee and salary related matters, from day-to-day compliance through to one off organisational structure evaluation. We’d be happy to help.

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