National Minimum and Living Wage increase comes into force
Both the National Minimum Wage (NMW) and National Living Wage (NMW) still increased as of April 1, 2020. However, the National Hair & Beauty Federation (NHBF) has said that beauty salons will bit hit hard by the increase, given the current coronavirus situation.
The NHBF has received confirmation that:
- Employees are entitled to National Minimum Wages and National Living Wages when they're working
- Furloughed employees are not working and so are not eligible for minimum wages (NMW/NLW) during this time
- The scheme will make up 80% of wages for all employees, including those on the NMW. This amount could be less than the NMW
- While on furlough, employees' wages will be subject to the usual income tax and National Insurance
- Employers can claim for employer National Insurance Contributions and automatic enrolment employer pension contributions (unless the employee has opted out)
- Employers cannot claim for employer National Insurance or pension contributions on any amounts they may choose to pay over the 80% provided by the Government
- For full-time and part-time salaried employees, the employee’s actual salary before tax, as of 28 February, should be used to calculate the 80%. Fees, commission and bonuses cannot be included.
“We understand that businesses and individuals are under financial pressures that no one has ever experienced before,” said Hilary Hall, NHBF chief executive. “The timing of the rises for NMW and NLW is far from ideal in the current circumstances. But at least they will give a small increase to support beauty therapists at this difficult time.”
Many in the industry are currently receiving 80% of their wages while they are furloughed and are struggling financially," added Hall. However, the NHBF will be asking the Low Pay Comission to consider both the timing and size of future rate rises, dependent on how the economy responds after the coronavirus circumstances have ended.
The Government has stated that the NMW and NLW increases will ensure wages continue to rise for the lowest paid workers. It also said the recently announced measures to support businesses and workers will help to protect jobs.
