The National Living Wage has changed - is your salon prepared?
The cost of staff wages is a huge consideration for any salon. So when, on the 1st
April 2016, the government’s compulsory National Living Wage for employees aged 25 and over increased by fifty pence to £7.20 an hour, your business will likely have felt the impact.
Although the rate for employees aged between 21 and 24 remains unchanged at £6.70 an hour, that will increase to £6.95 an hour from October 2016. Being mindful of these further changes and preparing for the rise in hourly pay now is essential.
This also applies to our salon partners who hire apprentices and support them through their training with us here at the LHAA. For apprentices aged 16 to 18, or those aged 19 or over who are in the first year of their apprenticeship, the rate is still £3.30 an hour but, from October 2016, it will rise by ten pence to £3.40 an hour.
As a salon owner, there are a few things you should have already done to prepare for the recent change: you should be familiar with the new increase for employees aged 25 and over, have identified which members of your staff are eligible and updated your payroll system and payment processes accordingly. You should also have notified your staff about any changes to their salary. Although for most employers the adjustments will be relatively minor, HM Revenue and Customs have clearly stated they will rigorously enforce the new NLW change and that the penalties for non-compliance will be severe, so it is vitally important not to be caught out.
LHAA Ambassador Martin Gold says:
This is a real concern for salons. I have no doubt that salons should be paying this but for many it’s a questions of general economics and the overall uplift in income needed to cover the increased wage bill so for some I am sure it will lead to a reduction in staff in the longer term.
More information can be found at the government’s dedicated website, livingwage.gov.uk
and hashtag #NationalLivingWage