The government has published the draft regulations introducing the new National Living Wage (NLW). This will start on 1 April 2016. The NLW gives a 50p premium on the national minimum wage (NMW), in effect creating an extra tier. The NLW rate will be reviewed, along with the NMW, in October each year. As a result, the rates until October 2016 will be:

  • £7.20 (NLW) for workers aged 25+, from 1 April
  • £6.70 (NMW standard rate) for workers 21 to 24 (21+ until 1 April)
  • £5.30 (development rate) for age 18 to 20
  • £3.87 (apprentice) for apprentices under 19 or 19+ but in first apprenticeship year
  • £3.30 (young workers) for non-apprentices aged under 18 but above compulsory school age.

The financial penalty for employers who underpay the NMW will also increase (for pay reference periods after 1 April) from 100% to 200% of the underpayment due to each worker.

The regulations providing a remedy for zero hours workers whose employers include exclusivity clauses in their contracts of employment (in breach of the ban introduced last year) take effect on 11 January. The regulations give zero hours employees the right (with no qualifying period of employment needed) not to be unfairly dismissed if the reason, or principal reason, is that the employee has failed to comply with an exclusivity clause. Zero hours employees and workers also have the right to not be subjected to a detriment for failing to comply with an exclusivity clause.