As the deadline for rises in the national minimum wage approaches, an employment lawyer has warned employers that the “penalties for non-compliance are severe” with fines of up to £20,000.
From 1 April 2025, workers aged 21 and over will receive £12.21 per hour under the national living wage, and younger workers (aged 18-20 years old) will see their minimum wage rise to £10.00 per hour, an increase of £1.40.
Daniel McAfee, head of legal operations at Lawhive and a UK lawyer, said the changes will have a substantial impact on take-home pay, with full-time workers potentially seeing an additional £1,400-£2,500 annually depending on their age.
Part-time and zero-hours workers are entitled to new minimum wage rates, regardless of their working pattern, he added.
“The law is absolutely clear on this point – all workers, regardless of their working pattern, are entitled to these new rates. This includes part-time workers, zero-hours contracts, and those with irregular hours.”
An employee’s right to the minimum wage is based on their worker status, not their working pattern. “Employers cannot avoid these rates by changing contract types or reducing hours without proper consultation,” he said.
McAfee added that these wage increases are a significant change for businesses, particularly those employing younger workers.
“Employers must conduct a thorough review of their payroll systems and employment contracts to ensure compliance. This isn’t just about changing hourly rates – it affects overtime calculations, salary sacrifices, and benefit structures. We recommend starting preparations well in advance of April 2025.
“While these increases represent a significant cost for businesses, they’re also likely to boost consumer spending and may improve worker retention and productivity. Companies should consider how to absorb these costs while maintaining competitiveness.
“This might involve reviewing pricing strategies, improving efficiency, or investing in automation.
“Looking ahead, businesses should prepare for continued wage increases and enhanced worker rights.”
He warned employers that non-compliance could be costly.
“The legal obligations for employers are stringent. You must not only pay the correct rates but also maintain accurate records of all payments and working hours. This includes travel time, training, and overtime where applicable.
!The penalties for non-compliance are severe – fines of up to £20,000 per worker, public naming by HMRC, and potential criminal prosecution for serious breaches. We’re seeing increasingly robust enforcement from HMRC in this area.”
