Make sure you understand the National Living Wage (NLW) and National Minimum Wage (NMW) rates – and ensure you know what apprentices should be paid. Plus – find out what help and advice is available from the NHBF for your salon or barbershop.
This blog post covers:
- NMW/NLW rates for 2020
- Legal backup and support from the NHBF
- Staying up to date with rates of pay
- What if you're not paying enough?
- What happens if you don't pay the NLW or NMW?
- Avoid naming and shaming
- Coping with the extra costs
- What the NHBF says...
- Old rates: 2019/2020
From April 2020, the new NMW/NLW rates will be:
From April 2020
NLW (OVER 25s)
NMW AGE 21 - 24
NMW AGE 18 - 20
NMW AGE 16 - 17
Our free expert guide to the NMW and NLW is available to NHBF Members only. It includes detailed information about how the NMW and NLW impact the hair, beauty and barbering industry.
Find out more about becoming a Member and join now for less than 80p a day.
The NHBF offers a wide range of invaluable benefits including our unique 24/7, 365 days a year legal helpline for hair and beauty employment and HR issues – which is completely free for NHBF Members.
This indispensable legal backup provides sound and practical advice on how to deal with a range of common employment issues, from contracts, apprenticeship agreements, absence and holidays, to redundancy, managing staff performance and maternity arrangements.
• NLW and NMW rates change every year. Always check to make sure you are paying your salon or barbershop employees the right amount.
• It’s also important to keep on top of staff birthdays – your employee may be entitled to a higher rate of pay at some point during the year. It’s a good idea to set up automatic alerts on your computer system.
• If you have an accountant, don’t rely on them to alert you to rate rises and possible underpayments – make sure you understand what’s required and that everyone working in your salon or barbershop is being paid correctly. Remember: if you get something wrong you will be liable, not your payroll provider.
Don’t panic! Let HMRC know and tell them you will be putting things right. You will need to pay your salon or barbershop employee any arrears that you owe them and make sure they are on the correct rate from now on.
Be aware that an employee or ex-employee would be entitled to report you to the HMRC which could result in an investigation and a fine of up to £20,000. Your salon or barbershop may also be named and shamed by the government (see below) which could affect the reputation of your business.
The NHBF warns that the government is committed to enforcing the National Minimum wage and will continue to publicly ‘name and shame’ companies who fail to pay the correct rates.
There are three pieces of key advice when managing your budget: plan, plan, plan. To ensure the continued success and profitability of your salon or barbershop it’s vital to create a cash flow forecast. Find out how to take control of your cash flow.
You could also take positive steps to increase your income through innovation. For example, by offering new services or increasing your retail sales.
Thirdly, make sure you are making the most of marketing possibilities to boost your income by attracting new clients to your salon or barbershop. Find out how to market your salon for (almost) free.
The NHBF campaigns on behalf of the hair, beauty and barbering industries on many topics, including in the National Living Wage (NLW) and National Minimum Wage (NMW). Find out more.
The NHBF is also sending an early warning to salon and barbershop owners that from April 2021, the National Living Wage will apply to those aged 23 and over (NLW currently applies to those aged 25 and above). The government also intends to reduce this further to anyone aged 21 and over by 2025.
• Make sure you know what the NLW and NMW rates are.
• Understand apprenticeships rates and don’t be caught out.
• Take positive action if you realise you are underpaying.
• Don’t underpay by mistake – for example, tips can’t be counted towards wages.
• Keep on top of staff birthdays – they may be entitled to an age-related pay rise during the year.
• Avoid being ‘named and shamed’ by the government.
• Take positive steps to boost your income to help cover costs.
More from the NHBF
Bookmark our website to make sure you’re up to date with all the latest news, views, information and advice relating to the hair, beauty and barbering industry.
• Starting up
• Salon software
Read more of our brilliant blog posts to gain expert business insights into key hair, beauty and barbering issues.
The National Living Wage from April 2019 for over-25s was:
The National Minimum Wage rates for 2019/20 were:
- £7.70 for 21 to 24-year-olds.
- £6.15 for 18 to 20-year-olds.
- £4.35 for 16 to 17-year-olds.
Apprentice rate: £3.90
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We hold regular workshops on how to get the best from your team, including setting targets, monitoring performance and carrying out appraisals. Find out more or call our friendly membership team on 01234 831965.