The National Living Wage will rise by more than four times the rate of inflation in April 2020

The government has announced a 6.2% increase in the National Living Wage (NLW) in April 2020 with what they say is the “largest cash increase ever”.

2.8 million full time workers will receive an extra £920 annually that will help with the rising cost of living.

The National Living Wage and National Minimum Wage are set by the Business Secretary each year on the advice of the Low Pay Commission.  They are enforced by HM Revenue and Customs who publish details of serious underpayment offenders.

National Living Wage (NLW) and National Minimum Wage (NMW) rates:

NLW / NMW Band Rate from 1st April 2019 Rate from 1st April 2020 Increase %
NLW for workers aged 25+ £8.21 £8.72 6.2%
NMW for workers aged 21-24 £7.70 £8.20 6.5%
NMW for workers aged 18-20 £6.15 £6.45 4.9%
NMW for workers under 18 £4.35 £4.55 4.6%
NMW for Apprentices £3.90 £4.15 6.4%

Reaction to the proposed new rates

The Federation of Small Business (FSB) have said “an increase of this magnitude means firms may recruit fewer people, cancel investment plans or consider redundancies”.   Labour on the other hand have called for the NLW to be raised to £10/hour, which it is due to reach in 2024 under current plans.

Are you an employer who needs help complying with the National Minimum Wage rules?  Or perhaps you’re an employee who isn’t sure they are being paid the correct amount?  For help with any questions on the National Minimum Wage, contact us today to book a free 30 minute consultation with one of our expert employment law solicitors.

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