With the UK’s National Minimum Wage (NMW) and National Living Wage (NLW) set to increase from April 2025, employers must ensure they remain compliant to avoid legal penalties. Here’s what you need to know to stay on the right side of employment law.
New Minimum Wage Rates from April 2025
• 21 and Over (NLW): £12.21 (up from £11.44)
• 18 to 20 (NMW): £10.00 (up from £8.60)
• Under 18: £7.55 (up from £6.40)
• Apprentices: £7.55 (up from £6.40)
Common Compliance Pitfalls
Many employers fall foul of NMW laws without realising it. Common issues include:
• Salary Sacrifice Schemes: These can reduce an employee’s pay below the legal minimum if not managed correctly.
• Payroll Errors: Mistakes in payroll calculations can lead to underpayments.
• Work-Related Deductions: Deductions for uniforms, tools, or training costs must not push wages below the minimum.
How to Stay Compliant
1. Audit Your Payroll System: Regularly review payroll processes to ensure accurate calculations.
2. Review Salary Sacrifice Agreements: Ensure agreements do not breach NMW rules.
3. Train HR and Payroll Teams: Keep your staff up-to-date on the latest wage laws.
Why Act Now?
Non-compliance can result in:
• Fines and Penalties: Up to 200% of underpaid wages.
• Public Naming and Shaming: HMRC publishes the names of non-compliant businesses.
• Legal Action: Persistent breaches can lead to prosecution.
Get in touch
Need Expert Help? Understanding NMW compliance can be challenging, especially with frequent regulatory updates. Contact us for expert advice on staying compliant and safeguarding your business against costly penalties.
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