21 Mar 2018

Employee wage rates to change

Rural businesses are warned to ensure they comply with imminent changes to employee wage and pension rates.

From April 1 2018 increases in the national living wage (NLW) and national minimum wage (NMW) will come into effect alongside a 1% increase in employer contributions under the pension auto-enrolment scheme from 6 April.

The obligatory NLW, which applies to most UK workers aged 25 and over will increase by 4.4% this April from £7.50/hour to £7.83/hour and the NMW, which applies to most workers under 25, will also increase in line with the rates set according to various age brackets.

England wage rates from April 2018

Age

Rate (£/hour)

Increase (% change)

NMW (25+)

7.83

33p (4.4%)

NMW (21-24)

7.38

33p (4.7%)

NMW (18-20)

5.90

30p (5.4%)

NMW (16-17)

4.20

15p (3.7%)

Apprentice NMW

3.70

20p (5.7%)

Accommodation offset

7.00

60p (9.3%)

In other regions of the UK, wages are still negotiated by agricultural wages boards and therefore differ from rates set in England.

Accommodation

Rural businesses are also advised to ensure they comply with the changes in wage rates where accommodation is provided as part of the job.

Particular care needs to be taken that any charge made for housing does not push wages below the minimum thresholds.

The Government sets a value of accommodation, known as the offset rate, which from April 2018 is £7.00/day or £49.00/week.

If an employer charges more than the offset rate, the difference is taken off the worker’s pay which counts for the NMW or NLW meaning the higher the accommodation charge, the lower a worker’s pay when calculating the minimum wage.

However, if the accommodation charge is at or below the offset rate, it doesn’t have an effect on the worker’s pay, and if the accommodation is free, the offset rate is added to the worker’s pay boosting its value.

To find out more about these changes click here.

Read more like this here

 

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