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Pay Rise for Millions

Employers, the National Minimum Wage (NMW) and National Living Wage (NLW) is set to rise in April 2021. Are you prepared?

You will need to plan ahead for changes to ensure you don't fall foul of the minimum wage requirements. HMRC have published national offenders in the past. Even when it appeared those offenders were not aware they had breached the law.

Although having a national minimum wage today appears relatively uncontroversial, when it was first proposed in 1997, the idea of paying a minimum wage provoked a furious reaction. And it’s worth noting that the UK has been both a leader and a testbed for concepts such as the National Living Wage.

Although there are different stories to be told depending on whether you examine NMW or NLW and whether on a macro or micro level, and which sector of the economy you are working in, broadly, employers have coped with wage rises by absorbing the costs. A CIPD survey, found that the most popular employer response to the introduction and subsequent increases in the NLW was to accept lower profits.

In full, the increases are:

  • National Living Wage (23+) to increase 2.2%, from £8.72 to £8.91

  • National Minimum Wage (21-22) to increase 2%, from £8.20 to £8.36

  • National Minimum Wage (18-20) to increase 1.7% from £6.45 to £6.56

  • National Minimum Wage (under 18) to increase 1.5% from £4.55 to £4.62

  • Apprenticeship Wage to increase 3.6% from £4.15 to £4.30

Employers should prepare their payroll's before April by noting those employee rates that will change as a result of the above increases. The big change here is the top tier covers 23 yr olds and over, not just 25 yr olds and over! This is likely to be missed by many! Check employee ages against the above table to ensure you stay compliant.

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