Millions of low-paid workers in the UK will earn nearly a thousand pounds more per year as a new National Minimum Wage is introduced.
The new rate of pay will come into effect on 1 April 2020, and will mark the biggest ever rise since the Minimum Wage came into force in 1999.
How much more will workers get?
As of Wednesday (1 Apr), workers who receive the National Living Wage will be given a pay increase of 6.2 per cent.
This means the current hourly wage of £8.21 will rise to £8.72 for workers aged over 25, amounting to a pay rise of £930 annually.
The raise will also see younger workers receive a boost to their wages of between 4.6 and 6.5 per cent, depending on their age.
Workers aged between 21 and 24 will see a rise of 6.5 per cent, increasing their pay from £7.70 per hour to £8.20.
Wages for those aged between 18 and 20 will rise from £6.14 per hour to £6.45, under 18s wages will rise from £4.35 per hour to £4.55, and apprentice wages will rise from £3.90 per hour to £4.14.
When the increase was announced last year, Prime Minister Boris Johnson said: “Hard work should always pay, but for too long, people haven’t seen the pay rises they deserve.”
First announced by former Chancellor Sajid Javid, the changes were later confirmed in this year’s Budget by new Chancellor, Rishi Sunak.
The Prime Minister had been eager to show his government would deliver on the votes of the working classes in areas of the North East and Midlands, which voted Conservative for the first time at the last general election.
“Our government will put a stop to that, giving nearly three million people from Edinburgh to Eastbourne a well-earned pay rise, including the biggest ever cash boost to the National Living Wage.”
Who qualifies for Minimum Wage?
To receive the National Minimum Wage, workers must be at least of school leaving age.
Contracts for payments below the minimum wage are not legally binding, and workers are still entitled to the National Minimum Wage or National Living Wage.
Workers are also entitled to the minimum wage if they are:
- casual labourers, for example someone hired for one day
- agency workers
- workers and homeworkers paid by the number of items they make
- trainees, workers on probation
- disabled workers
- agricultural workers
- foreign workers
- offshore workers
Apprentices are entitled to the apprentice minimum wage rate if they are either under the age of 19, or they are 19 or over and in the first year of their apprenticeship.
Apprentices over the age of 19 who have completed the first year of their apprenticeship are entitled to the correct minimum wage for their age.
What is the difference between the National Minimum Wage and National Living Wage?
The National Living Wage was introduced by the government in 2016 and billed as a higher minimum wage rate for workers aged 25 and over. This pay rate is legally binding.
The current National Living Wage is £8.21, having risen from £7.83.
The minimum wage is a wage rate released by the government is a negotiated settlement, based on recommendations from trade unions and businesses.
The real living wage is an independently calculated wage rate which aims to be higher than the cost of living in the UK and London.
It is calculated by the Living Wage Foundation and takes into account rental costs, council tax, shopping costs, and travel costs.
Companies are not legally obliged to sign up to the real living wage, but can become an accredited real living wage employer if they choose.