Increases to National Living and Minimum Wage
From this April 2023, there will be increases to the National Living Wage, National Minimum Wage, and various forms of statutory pay. As many of you will be planning your budgets and costs for the next financial year, we thought the following information would prove useful.
National Living and Minimum Wage
The Minimum and Living Wage increases are as follows:
Age April 2023 Current (from April 2022)
Age 23+ (national living wage) £10.42 £9.50
Age 21-22 £10.18 £9.18
Age 18-20 £ 7.49 £6.83
Age 16-17 £5.28 £4.81
Apprentices* £5.28 £4.81
* for first year of their apprenticeship only
Apprentices
It’s worth noting that after 12 months, an apprentice will move onto the National Minimum Wage for their age group. They will need to have an apprenticeship agreement linked to an approved apprenticeship qualification.
For those aged 19 or over, who have completed the first year of their apprenticeship, they will be legally entitled to the higher National Living and Minimum Wage rates relevant to their age group. For workers aged 23 and over, who are not in their first year of an apprenticeship, they will be legally entitled to the National Living Wage.
It’s illegal for employers to pay below the National Living Wage and the National Minimum Wage. Your employees can report you to HMRC if they think you are underpaying them. So, it’s important to make sure your payroll team factor in the current rates.
Overtime and the National Minimum Wage
If you’re an employer who does not pay overtime, you will need to be mindful not to allow people to fall below the applicable minimum wage.
For example: Employee A earns £9.50 per hour x 37.5 hours per week = £356.25. But if they work 40 hours without any additional payment, this would reduce their hourly rate to £8.90, which would be unlawful.
So, when you are calculating weekly wages, it’s more accurate to use the calculation of 52.1428 week rather than just 52 weeks. Why? Because 365 days per annum divided by 7 days per week = 52.148 weeks in a year.
If you are concerned about how to apply these calculations to your payroll process, then please speak to our HR professionals for advice.
Increases to statutory pay
This April there will also be increases to the statutory maternity, paternity, adoption, shared parental and parental bereavement pay. Each one will increase to £172.48 per week (currently £156.66). Statutory sick pay will increase to £109.40 per week (currently £99.35).
As staffing costs are often one of the highest costs in a business, we hope the information above will help you with your financial planning. If your company is likely to be significantly impacted by the increases to the National Living or Minimum wage and statutory pay, then you might need to review your staffing structure. If you are in this position, always speak to an experienced HR professional, so you can make informed decisions about your business.
We offer a Retained HR Service which includes your own dedicated, CIPD-qualified HR Consultant. This regular form of HR support enables us to get to know your business, your culture, and your way of working. Our aim is to help you manage your human resources more effectively. We can help you review your staff structure and design a strategy that minimises any disruption and ensures business continuity.
At Invictus HR, we know that your people are the lifeblood of your business. Our human approach to human resources will help you manage your people and keep them motivated. We offer a range of HR support, which also includes one-off HR Projects. We can help you make changes to terms and conditions of employment, redundancies and TUPE transfers.
Whether you need regular HR support for your business, or you need advice on an ad hoc HR matter, please get in touch.
Sources:
(Supplied email)
https://checkyourpay.campaign.gov.uk/