National Minimum Wage Increase for October & Employment Law Update

26/09/2016 Filed under Accounts, Finance, HR, Manchester, Payroll, SME


The 1st October 2016 brings the last autumn increase for the National Minimum Wage with new rates displayed in the table below. This increase does not affect the National Living Wage and, from 2017, both the National Minimum Wage and National Living Wage will both increase each April and the October increases will cease.


National Minimum Wage Rates – 1st October 2016 (Next reviewed April 2017)
£7.20 per hour National Living Wage – Workers aged 26 and Over
£6.95 per hour Main Rate – Workers aged under 25 but at least 21
£5.55 per hour Development Rate – Workers aged under 21 but at least 18
£4.00 per hour Young Workers Rate – Workers aged under 18 but no longer of compulsory school age
£3.40 per hour Apprentice Rate – Apprentices under 19 or aged 19 or over but in the first year of their apprenticeship


The Government have also announced a number of legislative changes to Employment Law and, while some commencement dates are yet to be confirmed, they are expected to come into force within the first half of 2017.

If you would like to discuss the impact of the increase in National Minimum Wage or any of the below introductions to Employment Law and the effect on your business and staff, get in touch with one of our Advisers through the Contact page.


  • Gender pay gap reporting established

Employers with 250 or more employees will be required to publish details of their gender pay gap and gender bonus gap on a yearly basis. It is expected that the first reports will need to be published by April 2018. However, the pay information will need to be based on payments made over the employer’s pay period every April, beginning in April 2017. The bonus information will need to cover the preceding 12-month period, beginning with the 12 months leading up to April 2017.


  • Trade union law reformed

HR practitioners working in unionised environments will need to get their head around important changes to trade union law made via the Trade Union Act 2016. The majority of the changes are to the rules on industrial action, including the introduction of new voting thresholds. It is anticipated that the changes will come into force soon, but as yet there is no confirmed date for implementation.


  • Rights of Sunday shop workers enhanced

Shop workers will be given greater protection under new rules. They include a new right for shop workers to object to working more than their normal hours on a Sunday; and a reduction in the notice period for shop workers in large shops to opt out of Sunday working. A start date for the changes to the rules has yet to be disclosed.


  • Tax-free childcare scheme comes into force

In families where both parents work and each parent earns less than £100,00 per year, and a minimum weekly income at least equivalent to 16 hours at the rate of the national minimum wage, the Government will pay 20% of their yearly childcare costs (capped at £2000 for each child). The scheme will apply to parents with children aged under 12. The Government has said that the scheme will be introduced in early 2017.


  • Employers using foreign workers illegally face closure

In an attempt to stop employers turning a blind eye to illegal working, new powers are introduced to serve employers with a closure notice where illegal working is suspected. This will prevent access to the firm’s premises for a maximum of 48 hours. A further order can then be made to prohibit or restrict access to the employer’s premises for a period of 12 months. Again, there is no confirmed implementation date, but it is widely expected that these new powers will be created soon.


  • Immigration skills charge comes into force

The Government aims to reduce employer’s reliance on migrant workers by imposing a visa levy on organisations that sponsor worked from outside the European Economic Area and Switzerland. The Government has indicated that the immigration skills charge will be implemented in April 2017.


  • Changes to apprenticeships introduced

All large employers will be required to pay an apprenticeship levy set at 0.5% of the employer’s paybill. The money gathered via this scheme will be distributed to fund the cost of apprenticeship training and assessment. Other reforms to the rules applying to apprenticeships include that, to protect the term “apprenticeship”, training providers will be unable to describe a course as an apprenticeship where the course or training is not a statutory apprenticeship. In addition, public-sector bodies in England with 250 or more employees will be subject to an apprenticeship target. Apprenticeship starts will need to comprise at least 2.3% of the total workforce each year. The apprenticeship levy is expected to come into force on 6th April 2017, but there is not confirmed commencement date for the other measures.


Source: XpertHR