December 2020 – New Minimum Wage Rates & Furlough Claim Deadlines
Employment Update for Small Businesses
I would like to wish all subscribers a very merry Christmas (well as merry as it can be in the circumstances) and let’s hope the New Year is a lot better than the old one!
This month we report on the forthcoming changes to the age bands for the National Living Wage and the increases that are due in hourly rates from next year. Also a reminder of the tighter timescales that apply for claims under the new Furlough Scheme.
Please contact me if you would like to find out a bit more about any of the subjects raised in this update or if you need any help or advice.
Please forward this email to any of your contacts who might find it of benefit.
From 1st April 2021, the National Living Wage will apply to workers aged 23 and over. Currently it is for workers aged 25 and over. Also the rates for the National Living Wage and National Minimum Wage rates will increase as follows:
to £8.91 per hour (from £8.72) for workers aged 23 and over (+ 2.2%)
to £8.36 per hour (from £8.20) for workers aged 21 to 22 (+ 2%)
to £6.56 per hour (from from £6.45) for workers aged 18 to 20 (+ 1.7%)
to £4.62 per hour (from £4.55) for workers aged 16 and 17 (+ 1.5%)
to £4.30 per hour (from £4.15) for apprentices under 19 and those over 19 in their first year* (+ 3.6%)
*N.B. Apprentices over 19 and who have completed at least one year are entitled to the appropriate rate for their age.
The increases have been more modest this year, but the change in age bracket for the National Living Wage may have a significant impact on the wage bill for some organisations. A 23 year old who works 40 hours per week will now be entitled to an annual salary of just over £18,500, an increase of around £1,500 per annum.
If you have some staff on lower salaries, you will need to keep watch on the hours they work and check to ensure that you are complying with the minimum wage legislation, as penalties can be very severe for getting it wrong.
Latest Furlough Scheme
Time Limits for Claims
There are tighter timescales for claiming furlough pay under the latest scheme. Claims must be submitted in accordance with the following timetable, unless the employer has a reasonable excuse for missing the deadline (see below for guidance on what merits a “reasonable excuse”):
Claim for furlough pay within: Claim to be submitted by:
November 2020 14th December 2020
December 2020 14th January 2021
January 2021 15th February 2021
February 2021 15th March 2021
March 2021 14th April 2021
HMRC guidance on what would count as a “reasonable excuse” for late submission of a claim has the following examples:
your partner or another close relative died shortly before the claim deadline
you had an unexpected stay in hospital that prevented you from dealing with your claim
you had a serious or life-threatening illness, including Coronavirus related illnesses, which prevented you from making your claim (and no one else could claim for you)
a period of self-isolation prevented you from making your claim (and no one else could make the claim for you)
your computer or software failed just before or while you were preparing your online claim
service issues with HMRC online services prevented you from making your claim
a fire, flood or theft prevented you them from making your claim
postal delays that you could not have predicted prevented you from making your claim
delays related to a disability you have prevented you from making your claim