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National Minimum Wage increase from 1 October 2016

Posted on 30 Sep 2016 by Alexis Outram - What's trending?

From 1 October 2016, the National Minimum Wage (NMW) will be increased in line with the Low Pay Commission's recommendations for the minimum wage rates for 2016-17.

The NMW is the minimum pay most workers are entitled to by law and the rates increase each year on 1 October and are reviewed again on 1 April. The hourly rate paid will depend on a worker's age and if they are an apprentice.

The new rates are as follows:

  • £6.95 per hour for workers aged 21 and over
  • £5.55 per hour for 18-20 year olds
  • £4.00 per hour for 16-17 year olds
  • £3.30 per hour for apprentices*

* Under 19, or 19 and over in the first year of their apprenticeship

There are a number of people who are not entitled to the NMW:

  • Self-employed people
  • Volunteers or voluntary workers
  • Company directors
  • Family members, or people who live in the family home of the employer who undertake household tasks

All other workers including pieceworkers, home workers, agency workers, commission workers, part-time workers and casual workers must receive at least the NMW.

It is against the law for employers to pay workers less than the National Minimum Wage or to falsify payment records. Penalties for employers for non-payment of the NMW are likely to result in a notice or arrears and a penalty from HMRC.

HMRC can take an employer to court on behalf of the worker if they still refuse to pay. Workers can also go directly to the Employment Tribunal themselves.

It is important to note that the NMW is different to the National Living Wage, which is a rate that applies to eligible workers aged 25 and over. This is currently paid at a rate of £7.20 per hour and will be reviewed in April 2017, when it is forecasted to increase to £7.65.

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