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NMW increases take effect

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Newsletter issue - November 2016.

New rates for the National Minimum Wage (NMW) took effect from 1 October 2016, and employers must ensure that they implement them accordingly. The rates are as follows:

  • 25 and over - £7.20 per hour;
  • 21- to 24-year-olds - £6.95 an hour;
  • 18- to 20-year-olds - £5.55 an hour;
  • 16- to 17-year-olds £4.00 an hour; and
  • Apprentice rate - £3.40 an hour.

The increased NMW penalty took effect from 1 April 2016 and applies to any notice of underpayment relating to a pay reference period beginning on or after that date. Broadly, the penalty percentage which may be imposed for non-compliance has been increased from 100% to 200%. The maximum penalty is a hefty £20,000 per worker, although it may be reduced by 50% if the unpaid wages and the penalty are paid within 14 days.

For further information on the NMW, see the GOV.UK website at https://www.gov.uk/national-minimum-wage-rates.