The Chartered Institute of Payroll Professionals ……………………………………………………………Policy News Journal
National Minimum Wage/Living Wage
Low Pay Commission report on National Minimum Wage 18 March 2016
The Low Pay Commission (LPC) has published its 2016 Spring Report on the NMW . The core focus of the report is the recommendations on the rates affecting workers under 25 and apprentices to apply from 1 October 2016 which the government has accepted. The report includes the underlying evidence base, including extensive analysis of trends in growth, employment and pay. The report also provides analysis of the National Living Wage, which comes into force on 1 April 2016 for workers aged 25 and over, and sets out the preliminary views on how the LPC will approach making recommendations on its future path. The government has also confirmed that it will be aligning the cycle of the National Minimum Wage and the National Living Wage from April 2017. This means that the recommendations will last 6 months rather than the usual 12. As a consequence, the LPC will be making further recommendations in the Autumn on the level of all minimum wage rates (including the National Living Wage) from April 2017. To inform the next recommendations, the LPC will be consulting again in the Spring.
Structure, level and increases in the 2016 Spring Report on the NMW .
From October 2016-April 2017
Current level
From April 2016
Increase
National Living Wage (25+)
£7.20
£7.20
n/a
Adult rate (21+)
£6.70
£6.95
3.7%
Adult rate (21-24)
£6.70
Youth Development Rate (18-20) 16-17 Year Old Rate
£5.55
4.7%
£5.30
£4.00
3.4%
£3.87
£3.40
3%
Apprentice Rate
£3.30
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National Minimum and Living Wage guidance 1 April 2016
The Department for Business, Innovation and Skills (BIS) has published updated guidance on calculating the minimum wage which includes the new National Living Wage.
The National Living Wage applies to workers aged 25 and over from 1 April 2016. This new rate of pay was introduced through amendment to the National Minimum Wage Regulations 2015 to ensure that the rules that apply to the National Minimum Wage rates for workers aged under 25 also apply to workers entitled to the National Living Wage.
The guidance on calculating the minimum wage therefore also applies to workers entitled to the National Living Wage and covers eligibility, calculation, working hours to be included and enforcement of the minimum wage.
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