Ever wondered what the difference between the national minimum wage and the living wage is? Well here we explain the national minimum wage v living wage puzzle.
April 2016 is due to see the introduction of the national living wage which will increase the national minimum wage to £7.20 for adults over the age of 25 up from the current £6.70. This will take effect via a new national minimum wage and whilst there has been much publicity on the potential effects on employers and these being passed onto customers, some employers will not realise the changes and could fall foul of the new rules. The draft National Minimum Wage (Amendment) Regulations are currently in draft before parliament.
A new regulation will also increase the financial penalty payable by employers who underpay the national minimum wage from 100% to 200% of the underpayment due to each worker.
The Government continues to name and shame those who fall foul of the national minimum wage legislation and in addition some employers are finding themselves on the receiving end of negative publicity on the subject. Take for example the coverage of Sports Direct in December with the suggestion that some temporary staff are effectively being paid less than the minimum wage at some of their warehouses because of a stop and search system at the end of the shift for which they are unpaid but which can take 15 minutes to go through.
The changes overall could lead to more naming and shaming and enforcement action could equally increase. It is a case of watch this space.