The National Living Wage of £7.20 came in to force on 1 April 2016 for any workers aged 25 or over.

A number of employers have been reported in the news for making changes to benefits packages to try and recoup the financial burden imposed by the National Living Wage. Waitrose has stopped paying Sunday and overtime rates for new starters, Café Nero has stopped giving staff free food, and Carillion are cutting hours for staff.

Manpower (the recruitment agency) carried out a survey of 2,100 UK employers and found that workers would see little difference in their pay packets after businesses make savings in other areas e.g. by cutting overtime pay rates or reducing the number of better paid, supervisory roles.

You might have seen the name and shame list of employers not paying the National Minimum Wage in the press: over 90 employers have been named including one of my old employers! It has been announced that HMRC’s budget for enforcement has been increased from £13million to £20million for this tax year and they are clamping down on National Minimum Wage infringements.

Please note HMRC are investigating contracts where a worker’s wages may dip under the National Minimum Wage because of the timing of wage payments. For example: if a worker is paid the NMW rate per hour, but receives their wages as a fixed monthly payment, then in a longer month they will receive less than the NMW rate and in a shorter month they will receive more than the NMW rate. You may wish to check the wording of your contracts to avoid difficulties.