The regulations amend the National Minimum Wage Regulations 2015 to include the National Living Wage rate of £7.20 an hour for workers aged 25 and over, as promised by the government last year.
The government announced in its July 2015 budget that it would be introducing the National Living Wage at 50 pence above the National Minimum Wage rate. This is proposed to take effect from April 2016.
The regulations also amend the National Minimum Wage Act 1998 by increasing the financial penalty payable by employers who underpay the National Minimum Wage. This penalty is increased from 100% to 200% of the underpayment due to each worker.
The new minimum wages from 1 April 2016 will be:
The National Living Wage is not to be confused with the Living Wage, a voluntary rate of pay calculated by the Living Wage Foundation by reference to the cost of living in the UK. The Living Wage is currently £8.25 in the UK generally and £9.40 in London. The Living Wage Foundation states that the Living Wage 'is good for business, good for the individual and good for society'.
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