27th April Employee birthdays and national minimum wage pay increases
2 min read
Happy Birthday? Have a pay increase! The National Minimum Wage (NMW) is paid according to an employee’s age, with the rates reviewed each year and increase normally in line with inflation. If you have employees between the age of 18 – 25 years, a birthday may mean a pay rise.
Statutory Rates Table
Statutory Rates 2017/2018| Rate before 1st April 2018 | Effective from 1st April 2018 |
|
|---|---|---|
| Minimum wage for young workers i.e. for 16 and 17 year olds | £4.05 per hour | £4.20 per hour |
| Minimum wage for workers aged 18 to 20 (and those aged 21 and over doing accredited training for the first 6 months of employment) | £5.60 per hour | £5.90 per hour |
| Minimum wage for workers aged 21 and over | £7.05per hour | £7.38 per hour |
| National Living Wage for workers aged 25 and over | £7.50 per hour | £7.83 per hour |
| Maximum guarantee payment per day | £27.00 per day £25.90 (NI) | £28.00 per day effective 6 April 2018 £25.90 (NI) |
| Maximum compensatory award for unfair dismissal | £80,541 £79,100 (NI) | £83,682 effective 6 April 2018 £79,100 (NI) |
| Statutory Sick Pay | £89.35 per week | £92.05 per week effective 6 April 2018 |
| Statutory Maternity Pay, Statutory Paternity Pay & Statutory Adoption Pay | £140.98 per week / 90% of the person’s average weekly earnings if that is less than £140.98 | £145.18 per week / 90% of the person’s average weekly earnings if that is less than £145.18 |
| Maximum amount of a week’s pay which may be used to calculate redundancy payment | £489 £500 in NI | £508 effective 6 April 2018 £500 (NI) |
To help you manage this, our tips are:
- Make sure that you write to the employee informing of the rate change – we have a letter on our toolkit for this purpose. The letter details the change and explains why this has happened and from when, to ensure there is no misunderstanding.
- Keep records and have a tracking system to ensure you are prepared for when this needs to be applied
- Have regular checks – it is the employer’s responsibility to pay the correct rate of NMW so make sure you are confident you are on top of changes, especially if you have a young workforce.
- Pay the new rate from the start of the next pay reference period on or after their birthday
- If you accidentally miss the start date ensure that you back-date the pay as soon as possible
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If you do not comply with the NMW rules, a complaint can be made to the HMRC and you can be fined, so have the systems and checks in place you need.
If you would like assistance setting up appropriate records and checking systems, or reviewing your pay records, we would be happy to make a difference to your business. We provide HR support and advice to companies of all sizes and structures. We’d love to hear from you on 01473 360160.
To talk through the HR support services that may be right for you and your business, give us a call.
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