The National Minimum Wage is the minimum pay per hour almost all workers are entitled to. The National Living Wage is higher than the National Minimum Wage and is paid to all workers over 25.

The National Living Wage and National Minimum Wage are set to rise from April 2017. This means that the minimum amount you have to pay to those aged 25 and over will rise by 4% from the current rate of £7.20 to £7.50 per hour.

The National Minimum Wage will apply to workers under the age of 25.

It’s a criminal offence if you don’t pay someone the National Minimum Wage or National Living Wage. So as an employer you need to make sure you’re paying your staff the correct amount.

New rates for 2017

In previous years, the National Living Wage rates changed in April and the National Minimum Wage rates changed in October. From 2017, both rates will change in April and this combined change of rates will now continue each April. Below are the new rates for 2017.

Applying the rates to hourly paid employees

You should apply the new rates from the first full pay period after the rate change, depending on where 1 April falls in the week.

Example:

If 1 April fell on Wednesday, you would not need to apply the new rate until the beginning of the following week (the first full pay period).

For hourly paid employees, the average hourly pay has to be at least the National Minimum Wage based on the period each pay packet covers.

HMRC officers have the power to check all employers’ records to ensure that the correct pay rates are being paid to each employee. If you are found to be in breach of the National Minimum Wage or National Living Wage, you will be subject to a heavy fine. You will also have to pay the arrears back immediately.

As an employer, it is your responsibility to keep records proving that you are paying the minimum wage – most employers use payroll records. All records must be kept for a minimum of three years.

With our front and back office systems tailored to the recruitment industry, Premier Placement Services adjust pay rates to workers and client charge rates in accordance with current legislation.