From 1 April 2016 there will be a change to minimum earnings that will affect the amount of money that low paid workers get in their pay packets, and it applies to temporary workers too.
Announced by the Chancellor George Osborne in his July budget, the new National Living Wage will apply to workers aged 25 and over and will be £7.20 an hour, rising to £9 an hour by the end of this parliament in 2020. It will apply to all employees, whether full or part time, temporary or permanent.
It will replace the National Minimum Wage – currently £6.50 an hour (due to rise to £6.70 an hour in October) for the over-21s. After 1st April those workers aged under 25 will still earn at least the National Minimum Wage.
It is expected that the move will give a pay rise to six million people.
Compulsory National Living Wage
What is currently referred to as the living wage is not compulsory, as the new one will be, but an informal benchmark promoted by the Living Wage Foundation and calculated as the level of pay that would give workers a basic standard of living. This is currently £7.85 an hour (£9.15 an hour in London).
Although the rise signified by the new National Living Wage is only 70 pence initially, the effect on payroll companies who may be ‘employing’ thousands of people will be significant because of the liability they have for pay between assignments. Employment contracts will have to be re-issued and the spotlight will be on compliance and full transparency.
The new rules will go hand in hand with changes to the amounts that can be claimed by freelance workers as travel and subsistence expenses.
Disqualification for Non Compliance
Company directors, including those running umbrella payroll firms, will face disqualification of up to 15 years if the new rules are not adhered to, as well as a maximum fine of £20,000.
If you are a temporary worker or migrant worker and you opt, through your employment agency, to be paid via a membership scheme such as Suits Me, the rise in the minimum wage will automatically be documented on your payslip.
Membership of Suits Me gives temporary workers, who often struggle to set up a basic bank account, the visible 24/7 control over their wages they need. It gives members a prepaid VISA debit card they can use in stores, online and generous cashback rewards in many high street stores.
For more information on Suits Me and how you can sign up through your recruitment agency, umbrella company or employer, contact firstname.lastname@example.org or phone 0844 322 1111.