National Minimum Wage increases in October 2016
Don’t forget to adjust your salon or clinic payroll on the 1st October 2016 as the new UK National Minimum Wage rates come into force.
This year you also need to think about the National Living Wage too.
At-a-glance: Minimum & Living Wage rates from 1st October 2016
So what’s the bottom line for your salon or clinic?
Let’s start with the National Minimum Wage increases:
1. New Minimum Wage Rates from 1st October 2016
Increases from 1st October 2016:
|Current rate||Rate from 1st October 2016|
|21-24 year olds||£6.70||£6.95|
|18-20 year olds||£5.30||£5.55|
|16-17 year olds||£3.87||£4.00|
The National Living Wage rates will increase from 1st April 2017 (rather than the usual October change for the National Minimum Wage).
Minimum Wage for Hair & Beauty Apprentices from October 2016
Salon apprentices are entitled to the apprentice rate (£3.40 from 1st October 2016) if they’re either:
- aged under 19
- aged 19 or over and in the first year of their apprenticeship
But apprentices are entitled to the Minimum Wage for their age if they both:
- are aged 19 or over
- have completed the first year of their apprenticeship
How does this impact on you?
An apprentice aged 22 who has completed the first year of their apprenticeship is entitled to a minimum hourly rate of £6.95 from 1st October 2016 regardless of what you call their role.
Now let’s take a look at how the National Living Wage affects your business:
2. National Living Wage increases April 2017 (not October 16)
The National Living Wage rates will increase from 1st April 2017 (rather than the usual October change for the National Minimum Wage) so there are still increases to come next year you need to budget for. The Government has yet to announce them.
So make a note in March 2017 to check the new rate for your salon team who are over 25 years old. National Minimum Wage rates will change every October as before.
3. Exemptions to the Minimum and Living Wage
But I only have one salon employee…
There are no exemptions according to the size of business, so even if you only have one employee in your hair or beauty business you are bound by the new rates.
There are a number of people who are not entitled to the National Minimum Wage and these include:
- self-employed people
- company directors.
All other hair and beauty workers including commission workers, agency workers, part-time workers and casual workers must receive at least the Minimum Wage.
4. Where can salon owners find help on the Minimum & Living Wage?
The most common mistakes in our industry arise around the Minimum Wage for apprentices as the regulations are complex. You’ll find a Calculator here on the Gov.uk website or the National Hairdressers’ Federation offer a free Guide (for members only).