Changes To National Minimum Wage Due To Take Place On April 1st

The National Minimum Wage (NMW) is the legal minimum amount that employers must pay workers in a country for their labour, typically set by the government.

Various factors, such as inflation, economic conditions, or government policy decisions, can affect the national minimum wage.

From April 1^st the rates of National Minimum Wage (NMW) will be as follows:

• National Living Wage (NLW) (21 and over): £12.21 (6.7% increase).
• 18-20 year old rate: £10.00 (16.3% increase).
• 12-17 year old rate: £7.55 (18% increase).
• Apprentice rate: £7.55 (18% increase).
• Accommodation offset: £10.66 (6.7% increase).

The changes are set to improve living standards for millions of workers and drive economic growth as part of the Plan for Change. The changes seek to put an end to age- based wage discrimination, meaning employers can no longer be justified in paying younger workers less for doing the same job as their older colleagues.

This builds on the commitment to be a pro-business, pro-worker, pro-growth Government. It delivers a key plank of the Plan to Make Work Pay, which is already set to boost the pockets of some the lowest paid workers by up to £600 a year through the Employment Rights Bill.

Changes to NMW may come as detriment to employers, bringing with it increased labour costs, which pose problems for profitability. For employers finding themselves worrying about the changes, it may be worth considering price increases, exploring outsourcing or engaging part-time workers, and improving operating efficiencies.

If an employer fails to pay the minimum wage, then they will need to pay the worker back in arrears. Additionally, they could be required to pay a penalty enforced by the government of up to 200% of the arrears capped at £20,000 per employee. It is recommended that employers undertake a yearly review of their pay, to ensure that they remain legally compliant.

If you are interested in any further information regarding meeting National Minimum Wage regulations, reach out to a member of the Employment Law Team for a Free initial call on this matter.