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National Living Wage on the up!

by | May 12, 2022 | News

living wage

If you are responsible for paying staff you need to be aware of pay increases that have come into effect. Under the minimum wage legislation, employees must be paid at least the statutory minimum wage for their age or whether they are an apprentice.

There are two types of minimum wage – the National Living Wage (NLW) and the National Minimum Wage (NMW). From 1 April 2022, the age threshold for the National Living Wage was reduced, based on recommendations made by the Low Pay Commission (LPC) in October 2021.

As it currently stands in the UK, tens of thousands of employers have signed up to the policy, with many employers joining the scheme during the pandemic in the hope to gain staff loyalty during a time of labour shortages and slow economic grow

Employees can expect a rise in pay to take effect no later than 15th May 2022. This promises extra income per hour that will no doubt help towards the ever-increasing cost of living.

At Spire HR It’s our job to keep businesses aware and up to date with all legislation changes, supporting you to be proactive as a business, and making you aware of the changes that you should implement.

The below explanation should help you to understand the key changes, and why you should be signed up to the policy.

What is the National Living Wage?

The NLW is a higher statutory minimum wage payable to employees whose age is above the NLW age threshold. Prior to 1 April 2021, it was payable to employees age 25 and above. From 1 April 2022, the NLW age threshold was reduced and employers are required to pay employees aged 23 and above the new NLW rates of pay. This meant a pay increase for around 300,000 working people – up 40p to £9.90 across the UK, and £11.05 in London.

What is the National Minimum Wage?

The NMW is payable to workers who are below the age of the NLW threshold. Prior to 1 April 2021, the NMW applied to employees of school leaving age and under the age of 25. From 1 April 2022, this has reduced to the age of 23 and over the school leaving age. Meaning, If you are a worker aged under 23, you are legally entitled to at least the National Minimum Wage rate relevant to your age group.

As of 1st April 2022, the new National Minimum Wage rates will increase to:

Under 18 – £4.81 (previously £4.62– a 4.1% increase)
18-20 – £6.83 (previously £6.56– a 4.1% increase)
Age 21-22 – £9.18 (previously £8.36– a 9.8% increase)

Apprentices

There is a separate NMW rate for apprentices. It is payable to apprentices under the age of 19 and also to those who are over the age of 19 and in the first year of their apprenticeship.

As of 1st April 2022, the new apprentice Wage rates will increase to:

Apprentices – £4.81 (previously £4.30– an 11.9% increase)

New rates from 1 April 2022

NLW: Workers aged 23 and above  NMW: 

Workers aged 21 and 22 

 NMW: 

Workers aged 18 to 20 

 NMW: 

Workers aged 16 and 17 

 NMW:  

Apprentice rate 
£9.90 per hour  £9.18 per hour  £6.83 per hour  £4.81 per hour  £4.81 per hour 

Check you are paying the correct rates

As a responsible, sustainable employer you should be ensuring that you are paying employees either the NLW or NMW in line with the new rates. You should also ensure that the correct processes are in place to identify when an employee moves into a new age bracket.

If you would like to find out more about these changes or need advice about the increases or any other HR advice, contact us today:  01925 626253 |  info@spirehr.co.uk

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