The Government has announced further increases to the National Living Wage (NLW) and the National Minimum Wage (NMW) will come into effect in April 2020. The proposed hourly rate changes are as follows:-
- NLW for those aged 25 and over increases from £8.21 to £8.72;
- NMW for ages 21 – 24 increases from £7.70 to £8.20;
- NMW for ages 18 – 20 increases from £6.15 to £6.45;
- NMW for ages 16 – 17 increases from £4.35 to £4.55; and
- Apprenticeship rates for under 19’s or those in the first of an apprenticeship increases from £3.90 to £4.15.
Although positive for those earning minimum wage, increasing the rates, considering the current rate of inflation, may put further pressure on cashflow for the firms facing reduced consumer demand and higher costs, causing training and investment budgets to suffer. According to the Federation of Small Business (FSB), firms may recruit fewer people or revise investment plans. Therefore, for the increases to be sustainable, the government may have to consider reducing other costs in order to create a better balance for businesses.
If you would like any advice relating to the matters in this article or any employment matters please contact Glyn Evans on 1934 637911 or email email@example.com