Though not a cause for concern amongst Virtual Office based businesses with employees on the road much of the time, SMEs with minimum wage staffers will have to be given the rate boost of 20p (to £6.70) for adults aged 21 years and older.
The new National Minimum Wage (NMW) rates comes into effect on 1 October 2015; employers are advised to adjust their books accordingly.
This is a rise of 3% and represents the largest increase in real terms for the National Minimum Wage since 2008. HMRC is responsible for monitoring the regulations and employers that fail to use the correct rates will have to reimburse their employees and may face penalty charges.
The rises are higher for young apprentices, with rates for under 19 year olds up 20 per cent to £3.30. For 18-20 year olds it's up 17p £5.30, and for 16-18 year olds will increase to up 8p to £3.87.
The independent Low Pay Commission (LPC) was setup in 1998 to advise the government on NMW matters following the National Minimum Wage Act, and is comprised of representatives from all sides of industry. Most of the rates mirror the recommendations made by the LPC, although the increase for apprentices is higher than what was suggested.
The new National Living Wage will come into effect from April 2016 and will initially be set at £7.20 per hour for the over 25’s. This represents a rise of 50p above the new NMW.
The hike comes as chancellor George Osborne is planning to push up the figure to £9 per hour by 2020, to mixed responses from big business the media on both sides of the argument.