Nikita Passi, Solicitor at Napthens outlines the new rates and what businesses need to do now before 1 April 2022.
The Government has announced the new National Minimum Wage (“NMW”) and National Living Wage (“NLW”) rates which will come into force from the 1 April 2022.
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What should employers do now?
Employers should ensure that they are now undertaking salary reviews in readiness for 1 April 2022.
Increases to salaries in line with NLW / NMW requirements should be confirmed to all those affected in writing.
It is also important for employers to remember that certain deductions from an employee’s wages should not be made if this deduction would mean that the employee receives less than the NMW / NLW. To aid employers, the Department for Business, Energy and Industrial Strategy has published a list of the main causes of NMW / NLW underpayment, which includes:
- Failure to pay a worker for any time during their shift when they are at the workplace and are required to be available to for work, even if no work is being provided at that time during their shift
- Failure to pay a worker for any travelling time or time spent carrying out training (however, please note that travel time does not need to be paid if an individual is travelling to and from their principal place of work i.e. commuting to and from home)
- Making a wage deduction or taking payments from workers for items or expenses that are connected with the job e.g. uniform or parking costs
- Failing to pay the correct rate for apprentices e.g. when an individual is incorrectly classified as an apprentice
- Failing to increase an individual’s pay when they become eligible for a new minimum wage rate following a birthday
That said, there are some instances when an employer can deduct sums from an employee’s pay which take this below NMW / NLW requirements. However, we would advise legal advice is sought prior to making any deductions from an individual’s salary.
If an employer does breach NMW / NLW obligations then they will be required to pay their affected employees in arrears at the current rates, as well as paying potentially costly penalties to HMRC. HMRC are also within its power to name and shame employers who are in breach of NMW / NLW requirements.
If you have any questions in relation to the above, then please do not hesitate to contact a member of Napthens’ Employment team.