Minimum wage increases - implemented as planned

Published on 1 April 2020

It is a chaotic and difficult time and, given the pressure many businesses are under, some may have been expecting the scheduled increases to be delayed. However, the 1 April minimum wage increases have gone ahead as planned and should not be overlooked by either employers or employees.

minimum wage graph going up
(c) Shutterstock / Hyejin Kang

The new national minimum wage (NMW) rates are as follows:

  From 1 April 2019 From 1 April 2020
Age 25 and over (national living wage - NLW) £8.21 £8.72
Age 21 to 24 £7.70 £8.20
Age 18 to 20 £6.15 £6.45
Age 16 to 17 £4.35 £4.55
Apprentice rate – payable to all apprentices under the age of 19 and to any apprentice in the first year of their apprenticeship, regardless of age £3.90 £4.15

 

The NMW and NLW rates are usually amended on 1 April each year.

If an employer provides an employee with living accommodation, the maximum that can be deducted from pay to cover the cost (from 1 April 2020) is £8.20 a day or £57.40 a week. If an employer charges more than this, the difference is taken into account when measuring pay that counts towards the NMW or NLW.

GOV.UK contains basic information about how to work out if minimum wage is being paid. For further information on how the minimum wage should be calculated, including how the accommodation offset works and how things like travelling time, tips and uniform deductions should be dealt with, please see our website guidance.

The new pay rate will only affect pay from the first full pay period beginning on or after 1 April 2020. For example, if an employee is paid weekly on a Monday to Sunday basis, the first full pay period on or after 1 April 2020 will be the week beginning Monday 6 April 2020. This means that if they work in the period Wednesday 1 to Friday 3 April, their pay will be based on the old rates.

Note that if an employee has been 'furloughed' and will receive financial support under the government's Job Retention Scheme, they will not be entitled to a minimum wage top up if they are only paid 80% of their usual earnings and this would be below the minimum wage for their usual working hours. This is because individuals are only entitled to the minimum wage for the hours they are working.

However, if employees are required to, for example, complete online training courses whilst they are furloughed, then they must be paid at least the NMW/NLW for the time spent training, even if this is more than the 80% of their wage that will be subsidised.

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(01-04-20)

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