What the Living Wage will mean to your business

LHS LLPYou will have seen in the news recently that the government announced a new wage for workers over the age of 25, at £7.20 per hour, rising to £9 per hour by 2020. This will have an impact on anybody who is currently receiving or paying the minimum wage.

If you are an employer you must comply with the law, paying at least the applicable wage rate for all working time, or you expose yourself to claims for unlawful deduction from wages. Do bear in mind that this increased rate of pay will also apply equally to travel time between sites.

The key points to bear in mind are:

  • Over 25’s must be paid at least £7.20 per hour from April 2016
  • Those aged 21-25 will still be paid at the applicable national minimum wage rate (currently £6.50, rising to £6.70 in October 2015)
  • The applicable minimum wage is payable for all "working time" – including travel between sites
  • Failure to pay at least the minimum applicable rate in the relevant "pay reference period" (when you process your payroll) could lead to claims for unlawful deduction of wages
  • Discrimination on the grounds of age (e.g. a policy of hiring under 25’s to avoid this wage cost) is unlawful

If you require any further information on this or have any specific queries relating to you or your staff then contact the legal advice line on 0345 026 0454

Post date: 29 Sep 2015

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