Expert Opinion: National Minimum Wage – the sooner you plan and budget for this the better

As this year’s ghoulish pumpkins are lit up for Halloween, is the real scare for employers in October the revamped National Minimum Wage?

It’s the start of a journey that will lead to the so-called Living Wage of £9 per hour by 2020. On 1 October the adult rate – for employees aged 21 and over – jumped 20p to £6.70 – a three percent increase, which is the biggest in real-terms since 2008.

In other bands, the rate for 18 to 20 year olds increased by 17 pence to £5.30 per hour, the rate for 16 to 17 year olds increased by eight pence to £3.87 per hour, the apprentice rate increased by 57 pence to £3.30 per hour, and the accommodation offset increased from the £5.08 to £5.35.

As the rate rises accelerate over the next few years, they are likely to put pressure on your business – particularly if you have to manage a knock-on effect up the pay chain. But get the presentation right, and you could also benefit from happier, more motivated staff.

The sooner you plan and budget for this the better.

Peter Jones runs the HR Dept in Swindon and Wiltshire. www.hrdept.co.uk/offices/south-west/swindon