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Legal Blog: National Minimum Wage - upcoming changes

Mon, 2015-10-05 12:11

The national minimum wage (“NMW”) increases each year and below are the new rates effective from 1st October 2015. 

Along with the NMW increases, the government announced in July 2015 Budget, its intentions to introduce a premium for workers aged over 25 years called the National Living Wage (“NLW”). This is not the same as the Living Wage which is set by the campaigning organisation the Living Wage Foundation.  The NLW will be a government set premium which will initially be set at 50p.  This will result in the NWM increasing to £7.20 for older workers, with the first premium commencing in April 2016.



Type of Payment

October 2015

Workers + 21


Workers aged 18 – 20


Workers aged 16 – 17





In addition to these changes, on 1 September 2015 the Department for Business Innovation and Skills (“BIS”) announced a new package of measures to improve compliance with the NWM and NLW.  Employers who do not comply will face higher fines and potentially be disqualified from being company directors.  It has also been revealed by BIS that HMRC’s current approach is to target the high-risk areas for non-payment of the NMW, these are currently the social care, hairdressing and retail sectors.

 These upcoming measures include the following:

  • doubling the penalties for non-payment of the NMW and NLW, increasing them to 200% of arrears.  This will be halved if an employer pays within 14 days.  However the maximum penalty of £20,000 per worker has not been changed;
  • a new HMRC team dedication to pushing serious cases of non-compliance will be set up.  This team will have the power to impose penalties, refer cases to the Crown Prosecution Service for criminal prosecution and the power to name and shame the worst-offending employers; and
  • a new penalty will be introduced for non-payment of not NMW and NLW which can result in the disqualification of an individual from being a company director for up to 15 years.

The government has also pledged to improve the guidance and support made available to employers to ensure compliance with the NMW and NLW.

BIS have not provided details on when these measures will be brought into force however employers should be aware of these changes and the increased focus on compliance with the NWM and the upcoming NLW.

Sophie Macphail

Solicitor   t: 03700 868136  e: