New National Minimum Wage (NMW) rates and compliance issues

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Circular No: NP/164/15

TO ALL BRANCHES & REGIONAL COUNCILS

Our Ref: S1/7

21st March 2016

Dear Colleague,

New National Minimum Wage (NMW) rates and compliance issues

Further to circular no. NP/164/15 of 8th September 2015, the Low Pay Commission’s recommendations for new NMW rates and on compliance work by HMRC was published on Monday. The Government has accepted the LPC’s recommendations on the NMW rates and will also introduce a new minimum rate for workers aged 25 years and over from 1st April.

The current and 2016-17 NMW rates are set out below:

Category    Current rate (per hour)    Oct 2016    Increase
25 years and over    £6.70    £7.20*    50p/7.4%
21-24 year olds    £6.70    £6.95    25p/3.7%
18-20 year olds    £5.30    £5.55    25p/4.7%
16 and 17 year olds    £3.87    £4.00    13p/3.3%
Apprentice rate**     £3.30    £3.40    10p/3%
Accommodation Offset    £5.35 (daily)    £6.00 (daily)    65p/12.1%
*’National Living Wage’ effective from 1st April 2016.
**Applies to all apprentices in year 1 of their apprenticeship and for 16-18 in any year of their apprenticeship. Otherwise age-related NMW rates apply.

The LPC will continue to recommend to Government NMW rates and will also recommend the annual National Living Wage (NLW) rate. From 2017, Government changes to the NMW and NLW rates will take effect from April every year.

On enforcement of the NMW, the LPC has recommended that the Government create a ‘public protocol’ to require HMRC to investigate third party complaints of non-NMW payment. The LPC recommend that this include provision for third party complainants to be entitled to regular feedback on the investigation and continued involvement in any resulting casework. The Government is ‘considering these options’ and will respond in full.

Strengthening the investigation of third party complaints would improve enforcement of the NMW for seafarers in the UK shipping industry, as well as providing a useful source of intelligence gathering on shipping companies engaged in and profiting from social dumping. The union is raising the profile of the LPC recommendation through the RMT Parliamentary Group and you will be kept updated with further developments.

I would be grateful if you could bring the content of this circular to the attention of all members in your Branch.

Yours sincerely

 

Mick Cash
General Secretary