22 November, 2023
The Government announced on the 21st November 2023 that it has accepted the Low Pay Commission's (LPC) recommendation on minimum wage rates to apply from April 2024. The Low Pay Commission is an independent body made up of employers, trade unions and experts whose role is to advise the Government on the minimum wage. The rate recommendations introduced were agreed unanimously by the Commission.
From 1st April 2024, the National Living Wage age threshold will be lowered to 21 (previously this applied to all workers aged 23 and over) and will rise from £10.42 to £11.44 per hour. There will be a £1.11 increase in the National Minimum Wage for 18-20 year olds to £8.60 per hour, and a £1.12 increase in the National Minimum Wage rate for both 16-17 year olds and the apprentice rate to £6.40 per hour.
It is worth noting that the National Living Wage is different from the UK Living Wage and the London Living Wage which are calculated by the Living Wage Foundation. The UK Living Wage and the London Living Wage are voluntary pay benchmarks that employers can sign up to if they wish. These are not legally binding requirements and are an attempt to measure need.
In the announcement made by the LPC it states that: This will be the largest ever increase in the minimum wage in cash terms and the first time it has increased by more than £1. The size of this increase is driven by the strength of pay growth across the economy, which is forecast to continue into next year.
It is important that businesses review pay rates in March to ensure that the increases to the rate of the NLW and NMW in April do not result in workers being underpaid once the increases take effect. It is also really important to keep track of the ages of individuals to ensure that their pay continues to comply with the NLW/NMW when they move into a different age band or complete the first year of their apprenticeship.
It is also worth noting that the hourly rate of the NLW / NMW which a worker is entitled is the rate which applied to the worker on the first day of that pay reference period. So by way of example, if an individual is paid the NMW / NLW and there is a NMW / NLW increase on the 1st April and they get paid monthly on the 15th of the month, this would mean:
For more information contact Catherine Hare in our Employment & HR department via email or phone on 0161 830 8813. Alternatively send any question through to Forbes Solicitors via our online Contact Form.
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