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1m workers set for NMW rise
More than one million workers will benefit after the government approved a rise in the National Minimum Wage (NMW) to £6.50 per hour later this year. Business Secretary Vince Cable announced on 12 March that he had accepted the independent …
More than one million workers will benefit after the government approved a rise in the National Minimum Wage (NMW) to £6.50 per hour later this year.
Business Secretary Vince Cable announced on 12 March that he had accepted the independent Low Pay Commission’s (LPC) recommendations for 2014, which mean that NMW rates from 1 October 2014 will see:
- a 19p (three per cent) increase in the adult rate (from £6.31 to £6.50 per hour)
- a 10p (two per cent) increase in the rate for 18 to 20-year-olds (from £5.03 to £5.13 per hour)
- a 7p (two per cent) increase in the rate for 16 to 17-year-olds (from £3.72 to £3.79 per hour)
- a 5p (two per cent) increase in the rate for apprentices (from £2.68 to £2.73 per hour).
Mr Cable said the rises would mean that more than one million low paid workers would enjoy the biggest cash increase in their take home pay since 2008.
Under the new rates, a worker on the adult NMW, working a 36-hour week, would receive £355 a year more in their pay packet when their pay increases to £6.50 an hour.
Employers who do not pay their workers the National Minimum Wage now face a penalty of up to £20,000.
Previously, employers who broke NMW law had to pay the unpaid wages plus a financial penalty calculated as 50 per cent of the total underpayment for all workers found to be underpaid with the maximum penalty of £5,000.
But new regulations that came into force on 7 March mean that the financial penalty percentage will increase from 50 per cent to 100 per cent of the unpaid wages due and the maximum penalty will increase to £20,000.
The government said in January it planned to bring in legislation at the earliest opportunity so that the maximum £20,000 penalty could apply to each underpaid worker.
Employment law is complex and constantly changing, which can make it challenging for employees to keep up with their legal rights. At Royds, we can provide expert advice on all aspects of employment law, including workers’ entitlement to National Minimum Wage and those who wish to bring a claim against their employer.