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Make the National Minimum Wage work for you

View profile for Phil Cookson
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Meeting the National Minimum Wage ought to be a priority for employers big and small across the UK - it is essential for providing individuals with enough money to get by in an economy with an ambiguous future. Despite this, it’s been widely reported that ‘gig economy’ companies such as Uber and Deliveroo are not meeting this requirement and some employees are still being forced to claim benefits to get by.

The draft National Minimum Wage (Amendment) Regulations 2017 were published on 1 February 2017 and have proposed to change the rates of the National Minimum Wage in accordance with recommendations from the Low Pay Commission. According to the draft regulations, the following hourly rates of national minimum wage will apply from 1 April 2017:

  • the national living wage (workers aged 25 and over) is £7.50;
  • the standard adult rate (workers aged between 21 and 24) is £7.05;
  • the development rate (workers aged between 18 and 20) is £5.60;
  • the young workers rate (workers aged under 18 but above the compulsory school age who are not apprentices) is £4.05;
  • the rate for apprentices is £3.50.

From 1 April 2017, the accommodation offset will be £6.40 each day.

Although some employers may initially be reluctant to fulfil these new regulations, it is widely believed a ‘fair pay for fair work’ approach makes the average employee's overall productivity increase. This is backed up by research conducted by the University of Lincoln, Middlesex University and the Australian Catholic University, which focuses on the productivity of employees post pay rise in lower paid jobs.  They found that productivity was “rising cumulatively by 6.4 % in all firms in the low-pay sectors and by 15% in the large service firms."

This implies that an ROI is a likely result for employers on a long term basis, which is, of course, always a positive for business owners.

If navigating the new NMW regulations still looks like a minefield please get in touch with Phil Cookson, Head of the Employment team at Roythornes by emailing: philcookson@roythornes.co.uk.