National Minimum Wage Increase: How to Measure Up

From 1st October 2014, the national minimum wage is increasing across the board. For those aged 21 and over, the minimum wage will increase by 20p, rising from £6.50 to £6.70 per hour. It is important for businesses to keep up with this chance and ensure they are meeting national minimum wage compliance guides.

Some businesses may wish to review their organisations pay rates compared to the new minimum wage, or assess where it fits with the living wage. Here are a few tips on how to review your pay rates against this chance:

Stay Up to Date with the Law

It may sound obvious, but not everyone has the time to spend time researching the latest legislation, especially if you do not have a dedicated human resource planning department within your organisation. The government website has all the information you should need, or a dedicated HR consultancy specialist like Blyth can help.

Identify affected workers

Identify employees that are eligible to receive the national minimum wage and which pay reference period will apply to each.

Check that no one is paid less that the minimum wage

Work out the gross pay received during the pay reference period, then calculate the numbers of hours worked (using a method adapted to the type of work). Divide the gross pay by the number of hours worked. This number shouldn’t be less than the minimum wage.

If any employee is found to being paid less than the minimum wage

Pay any arrears due to this employee immediately (using the right formula) and then increase his or her pay to the minimum wage (or higher). You must offer them the new national minimum wage amount in order to comply with employment law.

And now?

Keep records of your payroll to prove you are paying the national minimum wage. Also, it is always a good idea to be aware of the mechanisms for enforcement of this law.

If you need any help with this please don’t hesitate to get in touch with us and we’ll be happy to offer some knowledge and guidance. With years of human resource planning experience, we know employment law inside out and can help ensure you don’t get into a payroll mishap.

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