2021 National Living/Minimum Wage – ensure you’re compliant

The National Living/Minimum Wage is a statutory requirement for a minimum hourly wage to be paid to workers in the United Kingdom.

From April 2021, the National Living/Minimum Wage rates are as follows:

• The rate for workers aged 23 and over will increase from £8.72 to £8.91
• The rate for 21-22 years olds will increase from £8.20 to £8.36
• The rate for 18-20 years olds will increase from £6.45 to £6.56
• The rate for 16-17 years olds will increase from £4.55 to £4.62
• The apprentice rate (for apprentices aged under 19 or in their first year of apprenticeship) will increase from £4.15 to £4.30. 

Due to COVID-19, the rate increases aren’t as high as previous years. However, the increase of 2.2% from £8.72 to £8.91 will be extended to ages 23 and 24 for the first time. 

Failure to correctly meet and operate the new rates is not an option. If identified by HMRC, your organisation could be issued with severe penalties and be named and shamed on HMRC’s website. This applies to businesses with arrears of more than £500 in National Living/Minimum Wage payments to their workforce

Approximately 140 companies, including hotels and restaurants, were investigated between 2016 to 2018 for failing to pay £6.7m to more than 95,000 employees.

For businesses operating tronc schemes, allocations from tronc cannot count towards the National Living/Minimum Wage.

Finally, if you require your staff member (the worker) to purchase specific items, such as overalls, then any deductions made from employee pay or payments made to you (the employer) in respect of those items, will also need to be considered for National Living/Minimum Wage purposes, as relayed by Mark Taylor here.