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National Living Wage

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As you will no doubt be aware, April is often a busy month for Employment Solicitors and HR Advisers. It is one of the two months of the year where a number of Employment Law changes come into force.

National Living Wage

April has seen the introduction of the National Living Wage.

There are 4 categories of worker that the National Minimum Wage applies but from April 2016 an additional category of worker is being added.  The fifth category of worker is those aged 25 or over.  It is to these workers, that the National Living Wage will apply.

The National Living Wage will effectively result in a higher National Minimum Wage for older workers who fall into this fifth category.  The government has set its first premium at 50p, which means the National Living Wage is 50p higher than the National Minimum Wage.

This means that from this month you must ensure that all your workers aged 25 or over receive at least £7.20 per hour worked.

The existing provisions for determining whether the National Minimum Wage has been paid will also apply to the determination of whether the National Living Wage has been paid.

Employers should check that their staff are receiving the National Living Wage where applicable, and if not, action should be taken to remedy this to avoid claims at the Employment Tribunal.

Additional increases

There are also some additional increases in limits you should be aware of which kick in from 06 April 2016.  These are:

  1. The statutory cap on a week’s pay will be increased from £475 to £479.  This applies to unfair dismissal claims but also for the calculation of redundancy pay.
  2. The maximum compensatory award in an unfair dismissal claim remains capped at 12 months but the upper cap is increased from £78,335 to £78,962.  This means that the maximum an employee can claim for the compensatory award at the Employment Tribunal if it is found that they have been unfairly dismissed would be the lesser of £78,962 or 12 months annual salary.
  3. The statutory guaranteed payment (when workers are laid off) remains at £26 per day.

Whilst these additional changes are minor, it is important that employers are aware of them, and don’t forget about these and only focus on the National Living Wage.

If you want any advice in relation to any of the changes being implemented in April, please do not hesitate to contact our Employment & HR team on 01332 227 595.

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