National Living Wage and Inclusion of Commission in Holiday Pay Calculations

National Living Wage

As outlined last year the new mandatory National Living Wage (NLW) for workers aged 25 and over will come into force on 1st April 2016. This has been set at a minimum of £7.20 per hour – a rise of 50p relative to the current National Minimum Wage (NMW) rate.

Please note that failure to pay the correct rate could lead to a penalty charge of up to £20,000 for each member of staff underpaid. 

The current National Minimum Wage bands will continue to apply for those aged under 25.

Holiday Pay

One of the outstanding issues regarding holiday pay calculations that was still to be decided in the UK, was the question of commission.

This has now been settled following the judgement from the Employment Appeal Tribunal in the case of British Gas v Lock, which was issued on Monday 22nd February. The decision means those employees who receive commission must have this included in holiday pay calculations for statutory holidays. Further details on all the current requirements for calculating holiday pay can be found on the ACAS Website.






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