National Living Wage comes into force in April

The Forum of Private Business has reminded companies to prepare for the introduction of the National Living Wage which takes place from April 1 (depending on when the payroll period begins).

The headline rate will increase to £7.20. Business owners also need to check that that changes to salary sacrifice schemes do not lead to individuals being paid under the new hourly rate and that those on the apprenticeship rate are still on apprenticeship schemes.

Fines for failure to pay the national living wage will also double on April 1. If an apprentice is under 25 the employer will not have to pay employers’ national insurance.

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The Forum of Private Business’ research has shown that staff costs were the biggest single cost for employers in 2015 and that only 38 percent were able to pass on the price increases to their customers.

Another cost to employers is that they will have to pay £35,000 or more for all non-EU tier 2 (skilled worker) employees that they sponsor. However, statutory family-related pay and sick pay rates are frozen.

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