Increase In The National Minimum Wage Image

National Minimum Wage Increases From The 1st April 2018

The Chancellor of the Exchequer, Philip Hammond, recently announced in the 2017 Budget that the National Living Wage will increase from £7.50 per hour to £7.83 per hour from the 1st April 2018. Following on from that, the Government has now confirmed that it will accept the recommendations made by the Low Pay Commission with respect to an increase in the National Minimum wage to come into effect on the 1st April 2018

Increase In The National Minimum Wage

The Low Pay Commission published its recommendations for an increase in the National Minimum Wage on the 29th November 2017. The Government has accepted the recommendations. The new rates for the National Minimum Wage from the 1st April 2018 will be as follows:-

  • For workers aged 21-24 inclusive, the rate will increase from £7.05 to £7.38 per hour
  • For workers aged 18-20 inclusive, the rate will increase from £5.60 to £5.90 per hour
  • For workers aged 16-17 inclusive, the rate will increase from £4.05 to £4.20 per hour
  • The apprentice rate will increase from £3.50 to £3.70 per hour

The rate of the National Living Wage for those aged 25 and over will increase from £7.50 to £7.83 per hour from the 1st April 2018.

Low Pay Commission Recommendations

In making the announcement for an increase in the National Minimum Wage, the Government stated: “The Government has accepted all of the LPC’s recommendations, including for the largest increases in a decade for the rates that apply to 18-20 and 21-24 year olds. On 1 April next year (2018) these rates will increase by 4.7 per cent and 5.4 per cent respectively. These are greater percentage increases than both that of the National Living Wage, which will increase by 4.4 per cent, and forecast average earnings growth of between 2.5 and 3 per cent. The new rates will boost the earnings of between 260,000 and 360,000 young workers directly, and many more young workers will benefit. This is for two reasons: firstly, these increases lead to ‘spillover’ effects further up the pay distribution; secondly, even though they are not entitled to it, some young workers benefit from increases in the National Living Wage. We estimate that up to 45 per cent of 18-24 year old workers – or 1.3 million young people – could receive a higher pay increase than they would have done in the absence of the National Living Wage.

National Minimum Wage: Latest ‘Named & Shamed’ List Released

Primark and Sports Direct topped the latest ‘named and shamed’ list of those companies that had failed in their legal obligations to pay the National Minimum Wage and the National Living Wage. In total, 260 companies underpaid 16,000 workers, and they now have to pay them £1.7 million in back pay. Collectively, they have also been fined £1.3 million. Margot James, the Business Minister, stated: “There is no excuse for not paying staff the wages they’re entitled to and the government will come down hard on businesses that break the rules. That’s why today we are naming hundreds of employers who have been short changing their workers; and to ensure there are consequences for their wallets as well as their reputation, we’ve levied millions in back pay and fines.”

Primark, who came in third on the shame list, was guilty of deducting the cost of uniforms from its employees wages, which meant that those employees fell below the National Minimum Wage in terms of their pay. Consequently, the company now has to pay back £231,973 to 9,735 employees.

Meanwhile, Sports Direct and its staffing agencies, Best Connection and Transline, came in 4th, 1st, and 2nd respectively on the list of shame. Their pay back statistics are as follows:-

  • Sports Direct – must pay £167,036 in back pay to 383 workers
  • Best Connection – has to pay £469,273 in back pay to 2,558 workers
  • Transline – must pay £310,302 in back pay to 1,421 workers

Tim Roache, the general secretary for the GMB, stated: “These companies rake in millions of pounds in profit yet seemingly think it’s ok to cheat workers who are already paid a pittance out of the wages they are legally entitled to. It absolutely stinks.

Posted in General Employment Law, National Minimum Wage and tagged , .