We’d previously written about the forthcoming introduction of the National Living Wage (NLW), which comes into effect on 1st April 2016.
Last autumn, the government introduced a fairly steep rise in the National Minimum Wage (NMW), probably to help make the step up to the new NLW a little bit easier for business to accommodate.
From a legislative point of view it is imperative that your business is aware of and is paying the new NLW. From 1st April 2016 employers will be required to pay over 25 year olds a minimum rate of £7.20 per hour. There are very few exemptions, these can be found by clicking this link http://www.acas.org.uk/index.aspx?articleid=1902
Businesses also need to be aware that the NLW will not be replacing the NMW, which will continue, the National Living Wage is effectively a top up payment for over 25’s.
To aid with future staff planning, you should know that the government seeks to ensure that the NLW reaches a level of £9.00 per hour by 2020.
Whilst the NLW is generally considered a good thing (with possible exceptions such as the elderly care sector, where the change could have a significant and possibly negative impact on overstretched budgets), one thing that has always struck us as odd is why the NLW seems to start from an almost arbitrary age of 25? When the announcement about the NLW was made the reason given for it applying to 25 year olds was that a lower wage should apply to younger workers in order that they “secure work and gain experience” and “maximise the opportunities available to them.”
To me that reads like a typical bit of political hot air, it has no legal meaning. As we are all aware, employment law is dynamic, complicated and is full of eager solicitors looking to make a name for themselves by pushing boundaries and challenging legislation. As such I would be astounded if we do not see some sort of age discrimination challenge being launched against the NLW to try and understand why employees under the age of 25 do not qualify.
Watch this space!