The former Chancellor of the Exchequer, George Osborne, stated back in the 2015 Budget, that it was the aim of the Government to bring the National Living Wage up to £9.00 per hour by 2020. However, the £9 per hour National Living Wage 2020 target has since been undermined by slow earnings growth.
£9 Per Hour National Living Wage 2020 Target
The £9 per hour National Living Wage 2020 target is likely to fail according to forecasts. The National Living Wage is currently £7.50 per hour. However, the Office for Budget Responsibility now predict that the Government will fall 25p short in their objectives, and that by 2020, the National Living Wage will be £8.75 per hour. They attribute this to continuing slow earnings growth. As the rate for the National Living Wage is linked to average earnings, the fact that earnings growth has been much slower than expected means that the target of £9 per hour is unlikely to be met by 2020.
A spokesperson for the Office for Budget Responsibility stated: “The level of the National Living Wage consistent with our forecast has been revised down slightly since November – from £8.80 to £8.75 an hour in 2020, reflecting revisions to our earnings growth forecast.“
National Minimum Wage: Current Rates
At present, the rates for the National Minimum Wage are as follows:-
- For workers aged 21-24 inclusive, the rate is £7.05 per hour
- For workers aged 18-20 inclusive, the rate is £5.60 per hour
- For workers aged 16-17 inclusive, the rate is £4.05 per hour
- The apprentice rate is £3.50 per hour.
National Living Wage: Current Rate
The rate for the National Living Wage for those aged 25 and over is 7.50 per hour.
Latest ‘Named and Shamed’ List Released
233 businesses were ‘named and shamed’ in the latest list of those who had failed to pay the correct national minimum wage and the national living wage rates. Included in the list was Argos, who had failed to pay £1,461,881.78 to 12,176 employees. Overall, the 233 businesses concerned owe around £2 million in back pay to over 13,000 workers, and they have received £1.9 million in fines. Some of the businesses had incorrectly paid the apprentice rate to workers, whilst others had wrongly deducted the cost of uniforms from pay. There was also a failure amongst some of the business to properly account for overtime.
The Business Minister, Margot James, stated: “It is against the law to pay workers less than legal minimum wage rates, short-changing ordinary working people and undercutting honest employers. Today’s naming round identifies a record £2 million of back pay for workers and sends the clear message to employers that the government will come down hard on those who break the law.“