While the focus of the autumn budget was to deliver the last Pre-Brexit Budget for the UK, there were a few points for employers to consider with the increase to minimum wages probably having the greatest impact on small and medium sized businesses.
Any changes to the Minimum Wages have a significant impact on SME’s. As employers, the cost increase isn’t just on the salary, but also on associated benefits too, such as pension contributions.
The changes will take effect on 1 April 2019 and for adult workers over the age of 25, they will see an increase in their hourly rate from £7.83 to £8.21. So, if you employ 50 full time workers you can expect to see your salary costs increase by £40,000 a year. For many, this is a significant pressure on profits that will land in the middle of an uncertain Post Brexit era.
The minimum hourly rate of pay you must provide depends on the age of your employee and whether they are on an apprenticeship. So, do you understand the difference between the National Living Wage and the National Minimum Wage? And do you know how much to pay your 21 year old apprentice?
If you are unsure, we can help!
While these changes won’t take effect till next April, employers should start to think about their longer term pay strategy as further changes are anticipated in 2020. And if we see a change in government, Labour have previously stated they are committed to reaching a £10 per hour National Living Wage for all adult workers. Have you thought about how this may affect you?
Contact us for advice.