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Minimum Wage Rates Increase from 1st April 2020

By 17 February 20 No Comments

The minimum wage in the UK national minimum wage sets out the least a worker can be paid per hour by law. The law to introduce the minimum wage was passed in 1998 by the Labour government and it came into force the next year.

What happens on 1st April 2020

Rates from 1 April 2019 are Rates from 1 April 2020 will be
25 yrs old and over £8.21 per hour £8.72 per hour
21 – 24 yrs old £7.70 per hour £8.20 per hour
18 – 20 yrs old £6.15 per hour £6.45 per hour
16 – 17 yrs old £4.35 per hour £4.55 per hour
Apprentices under 19 or 19 or over who
are in the first year of apprenticeship
£3.90 per hour £4.15 per hour

It has been announced that on the 1st April 2020 the minimum wage will increase by amounts ranging from 4.6% to 6.5%. The National Minimum Wage (NMW) is the minimum pay per hour that most employees are entitled to by law. An employee’s age and if they are an apprentice will determine the rate they will receive and also agreed.

What are the effects

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Before the minimum wage was introduced, the lowest-paid people consistently saw the slowest growth in their wages. The introduction of the minimum wage reversed this trend.

The latest figures, set out in a report by the Resolution Foundation, suggest the proportion of employees in low pay has fallen for the first time in 40 years. This shift happened after the National Living Wage, a higher minimum wage for over-25s, was introduced in April 2016.

Low pay is defined as two-thirds of the median that is, the wage that would be in the middle if you listed everyone’s earnings from lowest to highest. In 2018, 17% of employees were in low pay, compared with 21% in 2015, according to the Resolution Foundation. The Low Pay Commission estimates that nearly a third of all workers have benefited directly or indirectly from the minimum wage.

It has also been recommended by the Low Pay Commission that the national living wage will be paid to employees aged 21 and over. The National Living Wage is an obligatory minimum wage currently paid to employees aged 25 and over that was introduced in April 2016. The government aims to achieve this recommendation by 2024.

At Payroll Village, we will keep you up to date on any changes in the world of payroll.

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