The National Living Wage (NLW) and The National Minimum Wage (NMW) – Simple Answers to Questions Surrounding the National Living Wage

Monday, July 25th, 2016

In this blog we give answers to some of the most common questions surrounding the national minimum wage which was brought in from April 1st 2016.

money

Q: What is the National Living Wage?
A: It is calculated by academics as the level of pay that would give workers sufficient money for a basic standard of living.

Q: How much is the national living wage?
A: From April 1st 2016 the NLW is £7.20 an hour.

Q: What is the difference between the Living Wage and the Minimum Wage?
A: According to the BBC, the technical answer is that the living wage will act as a top-up of the minimum wage for workers aged 25 and over – as it is compulsory it has left many people feeling that this is nothing more than a re-branded minimum wage (BBC news).

Q: Why has the national living wage become a legal requirement?
A: The NLW has been introduced because there are more people in the UK on low pay compared to other advanced economies (Telegraph).

Q: Has there always been a national living wage?
A: There has previously been a NLW, but it was not a legally enforceable level of pay, just an advised benchmark.

Q: As an employer do I have to pay the national living wage to all my employees?
A: You are legally obligated to pay the NLW to all your employees over the age of 25, full and part-time.

Q: What happens if I don’t pay the national living wage to my employees?
A: Penalties for non-payment of the NLW will be 200% of the money owed. Employers found guilty can be disqualified as a company director for up to 15 years. The maximum penalty is £20,000 per worker.

Q: Will the National Living Wage increase?
A: The Government wants the NLW to reach £9 an hour by 2020.


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