CHANCELLOR Sajid Javid has announced he will increase the National Minimum Wage.
But what is it now and what will it increase to?
What is the National Minimum Wage?
The National Minimum Wage is currently the amount workers under 25, but of school-leaving age, are entitled to.
The first National Minimum Wage was set in 1998 by the Labour government.
Before that, no official rate existed although trade unions battled hard to fight their workers’ corner.
The National Minimum Wage was re-branded to the National Living Wage in 2016.
An increase in the National Living Wage from 7.50 to 7.83 for those aged 25 and over came into effect on April 1 last year.
In April this year, the National Living Wage was increase by 38 pence-an-hour to 8.21.
However, the amount differs depending on age and whether the worker is on an apprenticeship scheme.
From April 2019 the rate for National Living Wage and National Minimum Wage is:
- 25 and over: 8.21
- 21-24: 7.70
- 18-20: 6.15
- Under 18: 4.35
- Apprentice: 3.90
The national limits are legally binding.
Anyone who thinks they are not getting the National Living Wage or National Minimum Wage should complain to their employer in the first instance.
If this does not get anywhere, the next step is to take the complaint to HMRC who will investigate.
When will the National Minimum Wage increase?
Chancellor Sajid Javid has announced there will be an increase in the National Minimum Wage from 8.21 to 8.72 an hour in April.
The 6.2% rise is double the rate of average annual wage growth and also twice the current rate of inflation, as well as the legal minimums biggest cash rise ever since it came into force in 1997.
The increase in minimum wage will deliver an extra 930 a year into the pockets of almost three million who earn it.
Which workers do not qualify for the National Minimum Wage?
Those who are self-employed, voluntary workers, company directors and family members who live in the home of the employer and do household chores do not qualify for either rate.
There is no difference in pay for those that live in London compared to elsewhere.
The only discrepancy is for people working in agriculture or horticulture.
Workers already employed before October 1, 2013, are entitled to the pay set under their contract of employment.