~By Lauren Poole~
You may recall our earlier blog on the National Minimum Wage changes in 2014; however, it has reached that time of year again where it all changes again. These changes tend to occur annually in the month of October. It is important that you keep up-to-date on the changes as it may affect your salary.
You need to be aware of the minimum wage changes to ensure you are being paid the correct amount for your age. Everyone can take a guess at the current minimum wage rate but, without consulting Google, would you know for definite?
The rate can be confusing and misunderstood simply because the amount is dependent on which age category you come under. It is specifically subject to change between the ages of 16-18, therefore if you are just starting work (or have children who are) it is vital you know the latest minimum wage legislation.
2015 National Minimum Wage rates:
- Apprentice – minimum hourly rate will rise to £3.30*;
- Under 18 – minimum hourly rate will rise to £3.87;
- minimum hourly rate will rise to £5.30;
- 21 and over – minimum hourly rate will rise to £6.70.
* The rate for apprentices above is for ages 16-18 & those aged 19 or over who are in their first year. All other apprentices are entitled to the minimum wage rate for their age.
The minimum hourly rate changes year-on-year so employers need to keep up to speed on the latest increase to ensure they are paying their employees the right amount. Failure to pay employees the right amount can cause hefty fines that could potentially bankrupt small businesses.
HM Revenue & Customs are responsible for the enforcement of national minimum wage. They have the power to impose penalties for failure to comply with the rules. These penalties can be large sums up to £20,000 per employee who is underpaid. In addition to this, the employer will have to make up any shortfall in pay to employees who have been underpaid.
Not only would it cost your company thousands of pounds, it could also ruin your reputation. HMRC have the ability to ‘name and shame’ companies who fail to pay their employees the minimum wage rate. This is why it is so important for businesses to keep a track of the latest minimum wage legislation, as even the most minor or accidental infractions could cost you your business.
If you need any advice on this, or any other employment matter, contact Mike Green, by calling 01792 468684.