April 2016 will see the introduction of the government’s new national living wage. The national living wage might sound new but is essentially the national minimum wage re-branded. Set at £7.20 it and will only apply to employees who are aged 25 and over. For those who are 24 and under the national minimum wage will still apply.
As a consequence of the introduction of new national living wage we will be raising our minimum rate required to ensure we can continue to pay the national living wage together with holiday pay, ERNI etc. Our minimum requirement for umbrella workers will rise (for those 25 and over) to £9.14 an hour. We will also be increasing our minimum on our PAYE model (again for those 25 and over) from £8.25 per hour to £8.89 per hour.
These increases will affect all payments made by Exchequer from the beginning of April 2016 which therefore covers work done from Monday 28th March onwards.
The jump from £6.70 to £7.20 offers a significant increase in pay for those who are over 25 and in low paid jobs. With some workers nearly £1,000 a year better off. Whilst there will be employers out there who are concerned about the cost of the increase the change will be good news for thousands of workers.
Whilst those aged 25 and over will benefit, unfortunately for younger workers there is no increase in the national minimum wage. Our minimum rate requirement for these workers will remain at £8.52 for those registered as umbrella employees with us and for those on our PAYE scheme the rate will remain at £8.25
