One of the announcements to come out of the Chancellor’s Spending Review was welcome increases to minimum wages.
From 1 April 2021, the National Living Wage will get a 19p increase, going up to £8.91 per hour, with this rate being extended to employees aged 23 and over. It currently applies to employees aged 25 year and over.
The original plan was for a more substantial increase, but the Low Pay Commission advised against this as it would have had a negative effect on businesses already struggling from Covid-19 restrictions. National Minimum Wage rate increases are similarly constrained, although the apprentice rate will go up by 3.6%. Future and current rates are:
| Age | From 1 April 2021 | Current |
| National Living Wage 23 and over (currently 25 and over) | £8.91 | £8.72 |
| National Minimum Wage 21 to 22 (currently 21 to 24) | £8.36 | £8.20 |
| National Minimum Wage 18 to 20 | £6.56 | £6.45 |
| National Minimum Wage 16 to 17 | £4.62 | £4.55 |
| Apprentices under 19 or in first year | £4.30 | £4.15 |
Apprentices over 19 who have completed the first year of their apprenticeship are entitled to the rate for their age. The provision of accommodation is the only benefit that counts towards national minimum pay, with the maximum offset increasing to £8.36 per day (£58.52 per week).
What counts as working time?
If you are required to work off-site from the main premises, deciding when to charge for your time is not always straightforward. For example:
- Count time on standby near the workplace, or waiting to collect goods, meet someone for work or start a job, but not rest breaks.
- Count time travelling in connection with work (including travelling from one assignment to another) and for training, but not travelling between home and work.
For example, if an employee has an appointment in the morning, then travels to the office to work there she should be paid minimum wage for the duration of the appointment plus the journey to the office. The break she takes for lunch at the office, however, is unpaid.
HMRC has a calculator to check if you paying the correct amounts of National Living Wage and National Minimum.
If you are unsure about anything, feel free to contact our team of Chartered Accountants on 0114 266 4432 or [email protected]
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