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The national living wage comes into effect on 1 April 2016. How well prepared is your organisation for applying rate changes when a worker moves from one rate to a higher rate band of the national minimum wage? Ashok Kanani looks at three practical scenarios.
The national minimum wage is set as an hourly rate. The rate a worker is entitled to depends on age. There is also an apprentice minimum wage. Until 31 March 2016, the highest rate applies to workers aged 21 years or over, and is £6.70 per hour.
From 1 April 2016, the rate of £7.20 per hour – the national living wage – becomes effective for workers aged 25 and over. Workers under age 25 (but 21 or over) will continue to be entitled to a minimum of £6.70 per hour.
Here, we provide three national living wage examples to help employers implement the new rate correctly.
Employer A has a worker aged 30 who is paid an annual salary of £15,126.80 for a 37.5 hour working week. The pay reference period begins each week on a Monday, and the employee is paid every Friday in cash.
The employee additionally receives accommodation, meals and pension as part of his employment package