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Rise in minimum wage will help low-paid but is a worry for small business owners

By Louise McAloon, partner specialising in employment law, Worthingtons solicitors

Published 01/11/2016

Employers are awaiting confirmation if the government will increase the National Living Wage by a further 40p per hour in April 2017, to £7.60 per hour for workers over 25 (stock picture)
Employers are awaiting confirmation if the government will increase the National Living Wage by a further 40p per hour in April 2017, to £7.60 per hour for workers over 25 (stock picture)

With the Autumn Statement from the Chancellor under four weeks away, employers await confirmation if the government will increase the National Living Wage by a further 40p per hour in April 2017, to £7.60 per hour for workers over 25.

The introduction of the National Living Wage on April 1, 2016, saw workers aged 25 and above receive an inflation-busting pay rise of 50p per hour, from the national minimum wage rate of £6.70 to £7.20 per hour. The national minimum wage rates apply for those under 25.

National Living Wage and National Minimum Wage rates are reviewed annually by the Low Pay Commission, with rate changes determined by the government and implemented in April each year.

When first announced in the 2015 Budget, the target set to be achieved through incremental increases was £9 per hour by 2020, with the intention to provide a pay raise for over six million people in the UK.

Whilst the benefits for low-paid workers are irrefutable; many employers, particularly small organisations and those in the retail and catering — which are heavily dependent on low-paid workers — are increasingly concerned about the financial impact. This is particularly the case given the uncertain economic forecasts post Brexit and commentators have questioned whether the 2020 target of £9 per hour can realistically be met.

Belfast Telegraph

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