Living wage to launch in April

The Budget in July last year saw chancellor George Osborne tackle the issue of excessive welfare payments being made to those in work by putting the onus back on employers to pay a living wage.

The national living wage (NLW) will be a premium that employers will be required to pay on top of the national minimum wage (NMW) to workers aged 25 or older. From April, the premium will be 50p an hour, which will increase the total minimum rate for in-scope workers to £7.20 an hour.

In September, the Department for Business, Innovation & Skills announced that it proposed to double the current penalty for failing to pay the NMW to 200 per cent of the shortfall (it is currently 100 per cent). The new penalty will be halved if paid within 14 days, and a cap of £20,000 per staff member remains.

A new unit is to be set up within HM Revenue & Customs specifically to pursue serious criminal cases where companies have avoided paying the NMW or NLW. This will have the power to ‘name and shame’ offending employers and company directors guilty of not paying the minimum wages could be disqualified for up to 15 years.

Identified NMW offences by directors and companies could lead to the operator concerned having to defend its repute in front of the traffic commissioner.