National Minimum Wage and National Living Wage Rates 2020


Posted on: Jan 14,2020


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National Minimum Wage and National Living Wage Rates are set to increase from 1st April 2020. The Department for Business, Energy and Industrial Strategy (BEIS) responded to the Low Pay Commission recommendations for minimum rates of pay in December 2019. BEIS has accepted all of the Low Pay Commission’s recommendations. Subject to parliamentary approval, the following rates will come into force from 1 April 2020:

  • The National Living Wage for workers aged 25 and over will increase from £8.21 to £8.72 per hour
  • The National Minimum Wage (NMW) for those aged 21 to 24 will increase from £7.70 to £8.20 per hour
  • The NMW for those aged 18 to 20 will increase from £6.15 to £6.45 per hour
  • The NMW for those aged 16 and 17 will increase from £4.35 to £4.55 per hour
  • The apprentice rate for those aged under 19 or in the first year of an apprenticeship will increase from £3.90 to £4.15 per hour
  • The Accommodation Offset is set to increase from £7.55 per day to £8.20 – this is the maximum daily amount which an employer can take into account when calculating whether NMW has been paid, where accommodation is provided to a worker.

BEIS notes that the National Living Wage will be set at 60% of median earnings and that the NMW rate rises are above the rate of inflation.

In September last year, the chancellor, Sajid Javid, pledged that the NLW will be increased to two-thirds of median earnings within five years, provided economic conditions allow. He also pledged to extend the NLW rate to those aged 23 and over from 2021, and to those aged 21 and over within five years. On the basis of this pledge, the NLW is expected to rise to around £10.50 an hour by 2024.

 

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