National Living Wage – What is still to come?

Following the introduction of the National Living Wage (“NLW”) in April 2016, which has been largely unpopular and has changed the horizon for many employers, we’re keen to keep you updated with the latest discussions on this topic to assist you with planning for any future changes.

As I’m sure you’ll know the NLW is due to increase each year with the target to be over £9 by 2020 for those over 25. It would therefore be prudent for employers to start thinking about how such increase will be managed in future budgets. Whilst it has not yet been published what the rate will increase by, the Trade Union, Unison, have published their predictions for the rises which suggest that in 2017 the NLW will be £7.65, rising to £8.20 in 2018, £8.70 in 2019, and reaching £9.30 in 2020.

In the lead up to April next year, the government will ask the Low Pay Commission, which currently recommends the level of the minimum wage, to suggest a figure for the new National Living Wage rate but we don’t think it will be too far off the predications above.

The House of Commons have also announced that they will be debating the introduction of the National Living Wage and the implications this has had on the bandings of the National Minimum Wage. This is due to fears that workers who are over the age of 25 would be discriminated against in favour of younger, cheaper, workers and concerns that workers aged 21-24 are now ineligible for the full minimum wage.

We will keep you updated with any developments however, if you have any questions in the meantime, or would like any specific support for your business, please do not hesitate to contact us.

Catherine Vardy
Employment Law Advisor
Howarths