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Introduction of National Living Wage a cause for confusion

Tayside solicitors, Miller Hendry, are urging local employers to familiarise themselves with impending changes to wage laws, which sees National Minimum Wage for over 25’s replaced with National Living Wage across the UK in April 2016.

The advice comes after the Chancellor of the Exchequer announced in his July Budget the UK Government’s intention to introduce the mandatory living wage rate of £7.20 an hour, a 10% increase from the current minimum wage. For employees under 25, the National Minimum Wage still applies, which also increased in October 2015.

After advice from the Low Pay Commission, the Government created the new National Living Wage based on median earnings across the UK and is to be regularly reviewed with the target of reaching 60% of median earnings by 2020.

Alan Matthew, employment law expert at Miller Hendry, explained:

“Employers must understand their requirement to pay their staff the statutory National Living Wage and how that differs from opting into the voluntary UK Living Wage.

He continued:

“It can often be quite confusing for employers about what they are legally required to do and what options are available. To avoid any potential employment disputes they must have the provisions in place when the law changes next April.”

The Government rates are not to be confused with the UK Living Wage, set by the Living Wage Foundation. A completely voluntary accreditation, the UK Living Wage Foundation requires businesses to pay all directly employed staff the minimum UK Living Wage of £7.85 in the UK and £9.15 in London.

Unlike the Nation Living Wage, the UK Living Wage applies to all employees over the age of 18 and is calculated according to the basic living costs in the UK. A total of 1,600 companies across the UK have already chosen to be accredited by the Living Wage Foundation.

The Scottish Government has also created the voluntary Scottish Business Pledge, to encourage Scottish companies to uphold some of the best practices in modern business and embrace fairness, equality, opportunity and innovation. Business who wish to opt into this pledge must pay the UK Living Wage of £7.85 but do not have to be accredited.

For further advice or for information about Miller Hendry Solicitors, visit

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