National Minimum Wage and National Living Wage

On the 1st April 2020 the new rates of National Minimum Wage and National Living wage (for over 25-year olds) will come into effect.

Year 25 and over 21 to 24 18 to 20 Under 18 Apprentice
April 2019 (current rate) £8.21 £7.70 £6.15 £4.35 £3.90
April 2020 £8.72 £8.20 £6.45 £4.55 £4.15

The higher rate starts to apply from the next ‘pay reference period’ after the increase. This means someone’s pay might not go up straight away. The ‘pay reference period’ is the period of time the pay covers. For example:

  • if paid daily, the pay reference period is 1 day
  • if paid weekly, the pay reference period is 1 week
  • if paid monthly, the pay reference period is 1 month

The pay reference period cannot be longer than a month.

Apprentices

Apprentices are entitled to the apprentice rate if they’re either aged under 19, or aged 19 or over and in the first year of their apprenticeship.

Apprentices are entitled to the minimum wage for their age if they are aged 19 or over and have completed the first year of their apprenticeship.

It is a criminal offence to not pay an employee the correct National Living wage or National Minimum wage. If an employer is found to be in breach, then they will need to pay any arrears due to an employee immediately. They will also be fined.

It is the employer’s responsibility to ensure that records are kept for 3 years that prove they are paying the correct National Minimum Wage and National Living Wage rates.

For any questions regarding the above, please do not hesitate to get in touch with Payroll Compliance Services Director, Tracey Simpson.