National living wage comes into effect from the 1st April 2016. Do you know the impact this could have on your business?
When the Government announced the introduction of the National Living Wage in the summer budget, it seemed a long way off. Now the change is only a couple of months away its vital you understand the changes and prepare your business.
Key Facts about National Living Wage:
The National Living Wage has been introduced to support the Government’s vision of a higher wage, lower welfare, lower tax society and it is going to directly benefit over a million workers in the UK aged 25 and over, so what is it:
- Living wage will see the minimum wage increase by 50p to a rate of £7.20 per hour.
- Every employee over the age of 25 will be entitled to this increase.
- The Living Wage will be enforced in the same way as the National Minimum Wage.
- The Government is committed to increasing this rate every year.
Many workers are welcoming this change and more than 70% of workers have said that they will feel more positive, for themselves and their families as a result of the introduction of the National Living Wage.As a business owner, it is your responsibility to ensure that you are ready for this introduction and begin paying the correct wages, here are 4 easy steps to prepare you:
The 4 steps you need to take to be ready for the change:
- Check you know who is eligible in your organisation.
- Take the appropriate payroll action. Find useful guidance in HMRC’s tutorials. (https://www.gov.uk/government/news/webinars-emails-and-videos-on-employing-people)
- Let your staff know about their new pay rate.
- Check your staff under 25 are earning as a minimum the correct rate of National Minimum Wage.
This increase will have a significant effect on your payroll and will lead to an increase in the amount that you pay on a monthly basis. With this in mind you may want to revisit your forecasts and plan for the year ahead.