The National Minimum Wage rates increase today. The adult rate rise is biggest since 2006 and the rates are below:
Apprentice - £3.30
Under 18 - £3.87
18 to 20 - £5.30
21 & Over - £6.70
Although the increase is effective from 1st October 2015 please note that in accordance with HMRC guidelines due to 1st October being a Thursday there are certain rules surrounding the commencement of the new increase in rate due to what is known as the Pay Reference Period.
Please see below details and an explanation of what this means and covers:
What is the Pay Reference Period?
The Pay Reference Period (PRP) is the period by reference to which a worker has been paid and is the basis for calculating whether the national minimum wage has been paid.
The worker does not have to be paid the national minimum wage for each hour worked, but they must be paid the national minimum wage on average for the time worked within the PRP.
How long is the Pay Reference Period?
The PRP is the period of time for which a worker's wage is actually paid. So, workers who are paid weekly will have a PRP of one week, workers paid daily will have a PRP of one day, and workers who are paid monthly will have a PRP of one month.
For the purposes of the national minimum wage, a PRP cannot be longer than one calendar month. So employers who wish to pay their workers at intervals more than a month apart will still need to make sure that workers receive at least the national minimum wage on average during each calendar month in order to comply with the law.
Change in NMW Rates and Pay Reference Periods
An employer must apply an increase in the NMW rates at the correct time with reference to a pay reference period. The date that an increase becomes effective will only need to be applied for the first time that it covers a whole pay reference period.
Situations when an increase in rate will apply and must be applied for the first completed pay reference period include:
when the NMW rates change (usually in October each year)
when a worker on reaches the compulsory school leaving age
when a worker reaches age 18 or age 21
when an apprentice reaches their 19th birthday