The National Living Wage (NLW) and National Minimum Wage (NMW) will rise again in April 2018. Make sure you understand the new rates – and ensure you know what apprentices should be paid. Plus – find out what help and advice is available from the NHF for your salon or barbershop.
This blog post covers:
- The new rates from April 2018
- New apprentice rates
- Apprentice rates: don't be caught out
- Legal backup and support from the NHF
- New rates at a glance
- 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 NHF says...
The new National Living Wage from April 2018 for over-25s will be:
- £7.83 (The previous rate was £7.50).
The new National Minimum Wage rates from April 2018 are:
- £7.38 for 21 to 24-year-olds.
- £5.90 for 18 to 20-year-olds.
- £4.20 for 16 to 17-year-olds.
(The previous rates were £7.05, £5.60 and £4.05).
The new apprentice rates will be £3.70. (The previous rate was £3.50)
But don’t be caught out: an apprentice aged 19 or over must get the National Minimum Wage appropriate for their age in the second year of their apprenticeship.
Our free expert guide to the NMW and NLW is available to NHF 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 75p a day.
The NHF 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 NHF 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 NHF 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.
“The most recent list included 260 companies,” says the NHF, “of which 26 (10%) were hair and/or beauty salons. It’s vital to be clear about what the NLW and NMW rates are and to ensure you pay the increased rates when they come into force in April.”
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 NHF 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).
The government has set a target for the National Living Wage to reach £9 per hour by 2020. The NHF says: “While we want to see everyone earning a decent wage, too many sharp increases over a short period will cause real pain for many salon owners particularly during a period of rising prices, rising inflation and uncertain consumer confidence. We call on the government to slow the increases down or run the risk of salon owners cutting hours or reducing staff.”
The NHF campaigns at the highest levels on behalf of its Members to get the best outcomes for your business. Find out more.
• 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.
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