October 2016: Changes to Employment Law

As of 1 October 2016, there are two changes, which will affect employers:

1. National minimum wage increases for some age bands

• The National Minimum Wage (NMW) for workers aged at least 21 but under 25 will increase from £6.70 to £6.95 per hour;
• The rate for workers aged at least 18 but under 21 will increase from £5.30 to £5.55 per hour;
• The rate for workers aged under 18 who are no longer of compulsory school age will increase from £3.87 to £4.00 per hour; and
• The apprentice rate will increase from £3.30 to £3.40 per hour.

The national living wage, the national minimum wage rate for workers aged 25 or above, is unaffected and will remain at £7.20 per hour.

Future changes to the NMW and the national living wage will take place at the same time in April each year, from April 2017.

2. The scheduled dates for the planned increases in the minimum level of contribution for pension’s auto-enrolment will change, to align the increases with the beginning of the tax year

As a result, the planned increase in October 2017, to 5% minimum contribution (2% employer), will now take effect in April 2018, and the planned increase in October 2018, to 8% (3% employer), will now take effect in April 2019.