On the 1st April 2017 both the National Minimum Wage (for workers under 25) and National Living Wage (for workers over 25) increased – do you have all the facts? Do you know if it will affect you?

Ten Live have collated all the information you need to know to understand the new changes.

What Is The National Minimum Wage?

The National Minimum Wage is the statutory minimum pay per hour workers under the age of 25 are entitled to by law. The rate will depend on your age and if you are an apprentice. To be eligible you must be at least school leaving age.

From 1 April 2017 The Current National Minimum Wage Rates Are:

• £7.05 if you are 21-24
• £5.60 if you are 18-20
• £4.05 if you are under 18
• £3.50 if you are an apprentice

What is the National Living Wage?

The National Living Wage is the statutory minimum pay per hour workers over the age of 25 are entitled to by law. It does not apply to those under the age of 25.

From April 1 2017 the National Living Wage rate increased to £7.50 per hour, up from £7.20, a 4% rise which will leave earners over the age of 25 up to £500 better off.

The National Living Wage was launched by former chancellor George Osborne in 2015 and is being phased in from 2016 to 2020. It is part of the government’s pledge to give a long term boost to workers in the UK – the target is to raise the National Living Wage hourly rate to £9 by 2020.

What is the difference between the National Living Wage and the Living Wage?

The government’s ‘National Living Wage’ should not be confused with the ‘Living Wage’. 

Unlike the ‘National Living Wage, the ‘Living Wage’ is not enforceable by law.

The ‘Living Wage’ is calculated according to the basic cost of living in the UK and is set by the Living Wage Foundation, an independent body. Employers can choose whether to pay the ‘Living Wage’ or not; it is on a voluntary basis.

According to the Living Wage Foundation, the ‘Living Wage’ is designed to pay “a wage that is enough to live on – good for business, good for the individual and good for society”.

As of 1 April 2017 the ‘Living Wage’ rate was set at £8.45 for all UK workers over the age of 18, except for those in London where the rate is currently set at £9.75.

Exemptions

It’s important to know whether you are eligible for the National Minimum Wage or the National Living Wage. There are a number of people who are not entitled to the either;

• Self-employed people.
• Volunteers or voluntary workers.
• Company directors.
• Family members, or people who live in the family home of the employer who undertake household tasks.

For the full list of ineligible workers, head to Gov.uk.

All other workers including home workers, agency workers, commission workers, part-time workers and casual workers must receive at least the National Minimum Wage.

Know Your Rights

Remember, it’s against the law for employers to pay workers less than the National Minimum Wage or to falsify payment records. The severity being that companies will be given a penalty for non-payment of 200% of the amount owed; unless the arrears are paid within 14 days. The maximum fine for non-payment is £20,000 per worker. Furthermore, employers who fail to pay will be banned from being a company director for up to 15 years.

There’s lots of information on government websites to find out what you are eligible to earn; head to Check your Pay, or Money Advice Service for help understanding your payslip.