“The new National Living Wage is introduced today, but it’s evolution rather than revolution,” says Carl Atkinson, employment partner at gunnercooke. He also clarifies that the new top rate of £7.20 per hour, is simply a new rate which is overlaid on the existing National Minimum wage structure and is applied to workers aged 25 or over.
Carl suggests that more significant changes will occur over the next few years as the new top rate is likely to increase to £9 per hour by 2020.
Up to now, many press reports have overlooked the increase in the penalty for non-compliance by businesses which also increases today. Companies now face a penalty equal to 200% of the amount underpaid to each employee capped at a maximum of £20k per person which could be a significant total for large employers.
Businesses should check that they are compliant to avoid significant penalties. If they are uncertain or require further advice contact Carl Atkinson.