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ARTICLE · 07 APRIL 2016

A Spring Clean – Important Rate Changes In April 2016

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April 2016 sees a number of important changes to employment rates with the introduction of the National Living Wage ('NLW') and increases to compensation and redundancy limits.

United KingdomEmployment and HR
Adam Grant
Adam Grant

April 2016 sees a number of important changes to employment rates with the introduction of the National Living Wage ('NLW') and increases to compensation and redundancy limits.

1. National Living Wage

The NLW will take effect from 1 April 2016 and will apply to all workers aged 25 and over. The initial rate is set at £7.20 (50p above the current National Minimum Wage ('NMW') rate of £6.70 for those aged 21 and over). The current NMW rates applicable to those under the age of 25 will continue to apply and will be reviewed in October 2016.

In addition to this change, financial penalties payable by employers who underpay the NMW will increase from 100% to 200% of the underpayment due to each worker from 1 April 2016. The current maximum penalty of £20,000 per worker, remains the same.

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