20th May, 2021

National Minimum Wage update – new levels and record keeping

A reminder to employers that the National Minimum Wage and National Living Wage increased in April 2021, as is common each year.

The new minimum wages are as follows:

• Aged 23 and over – £8.91
• Aged 21 to 22 – £8.36
• Aged 18 to 20 – £6.56
• Under 18 – £4.62
• Apprentice – £4.30

Note that the aged brackets have been changed from previous years, and employers should ensure that their payroll system has applied the relevant updates as mistakes have been known this time of year.

In addition, the National Minimum Wage (Amendment) Regulations 2021 has been introduced, making changes to the length employers need to keep records to prove the appropriate minimum wage is paid to its workers. Employers must now keep appropriate records for six years, rather than the previous three years, to show they paid workers the applicable minimum wage.

Data retention policies set up in compliance with GDPR should be reviewed in respect of key evidence of payments made to employees and hours worked, to ensure information is kept for the necessary period.

The onus is on the employer to prove they have paid a worker the appropriate national minimum wage and so record-keeping is essential. More than this, it is a criminal offence under s31 National Minimum Wage Act 1998 to fail to keep the appropriate records or to properly co-operate with an HMRC investigation into minimum wage.

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