On 1 April 2025 the National Living Wage increases hourly rates to £12.21 for those aged 21 and over, a 6.7% increase.
The minimum wage is £10.00 per hour for age 18-20 and £7.55 per hour for under 18s and the apprentice rate. After their first year of apprenticeship, apprentices should be paid according to their age – unless of course the organisation pays higher than this.
I’ve known several companies to be subject to HMRC audits on minimum wage compliance and it’s helpful to look at what things may catch companies out:
- Do you have salary sacrifice schemes which could take someone beneath the minimum wage?
- Do you require your employees to come into work early or finish late, for example for bag searches or start of shift briefings? Are they compensated for that?
- Do you require your employees to provide any of their own uniform?
- Do you have lower paid roles such as internships where people are working way beyond their contracted hours?
- Is your record keeping in good order?
The consequences of a minimum wage breach are significant - arrears of payment which can go back 6 years to former employees as well; penalty payment to HMRC of up to £20,000 per worker; company naming and shaming which of course could be terrible for brand reputation; and serious cases can involve criminal investigation/prosecution.
So, it helps to plan ahead and get sorted in time for 1st April. If you need any support in planning new pay rates or looking at your policies and procedures around this area then please get in touch.
Comments