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2020 National Living/Minimum Wage – ensure you’re compliant

With the National Living/Minimum Wage set to rise from April 2020, hospitality businesses must enforce the new rates or face serious penalties. Samantha Newton shares how a National Living/Minimum Wage review can ensure your business remains compliant and avoid possible fines.

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 2020, the National Living/Minimum Wage rates are as follows:

  • The rate for workers aged 25 and over will increase from £8.21 to £8.72
  • The rate for 21-24 years olds will increase from £7.70 to £8.20
  • The rate for 18-20 years olds will increase from £6.15 to £6.45
  • The rate for 16-17 years olds will increase from £4.35 to £4.55
  • The apprentice rate (for apprentices aged under 19 or in their first year of apprenticeship) will increase from £3.90 to £4.15. 

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.

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

Finally, if you require your staff (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 recently relayed by Mark Taylor here.

About the author

Samantha Newton

+44 (0)20 7556 1227
newtons@buzzacott.co.uk
LinkedIn

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 2020, the National Living/Minimum Wage rates are as follows:

  • The rate for workers aged 25 and over will increase from £8.21 to £8.72
  • The rate for 21-24 years olds will increase from £7.70 to £8.20
  • The rate for 18-20 years olds will increase from £6.15 to £6.45
  • The rate for 16-17 years olds will increase from £4.35 to £4.55
  • The apprentice rate (for apprentices aged under 19 or in their first year of apprenticeship) will increase from £3.90 to £4.15. 

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.

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

Finally, if you require your staff (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 recently relayed by Mark Taylor here.

How can we help?

How can we help?

We provide hospitality businesses with assurance by offering National Living/Minimum Wage audits. Our reviews will confirm exposure the proposed increases will have on your business, outline any concerns we may have and advise you on the options available, to ensure you meet the demands made by HMRC. 

If your organisation operates a tronc scheme, upon request, we will analyse your existing processes and provide a detailed report that highlights if your arrangement correctly provides an exemption to National Insurance Contributions.

For further information regarding a National Living/Minimum Wage review, please contact Samantha Newton on +44 (0)20 7710 3389 or alternatively, please complete the form below:

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