The Government has accepted the Low Pay Commission’s recommendation to increase the current National Minimum Wage rates in April 2024. As this is a legal obligation, employers must be aware of the new rates of pay and plan to adjust their payrolls accordingly.
While these changes will grant 2.7 million low-paid workers higher pay, the changes could also cause financial uncertainty for many small employers. The new rates are set out below.
National Minimum Wage Rates from April 2024
National Living Wage (21+) - £11.44 per hour
18-20 Year Old Rate - £8.60 per hour
16-17 Year Old Rate - £6.40 per hour
Apprenticeship Rate - £6.40 per hour
This new increase will represent the greatest ever increase to the National Minimum Wage. The new rate is factored by the pay growth across the economy.
How does this Compare to Current Rates?
The minimum wage will increase above £11 in April. This rise represents a 9.8% increase for over-23s on the previous year, and a 12.4% increase for workers aged 21-22. Currently, the existing minimum wage for those aged 21-22 is £10.18 per hour.
The National Minimum Wage for 18-20 year olds will also increase to £8.60 per hour, with current rates sitting at £7.49 per hour. What’s more, apprentices will get an hourly pay increase of more than 20 per cent, with rates rising from £5.28 to £6.40.
Why are the Rates Changing?
The decision for this rise has been made due to the increase in the cost of living squeezing household budgets. Low income individuals and families have been hit the hardest due to higher food, water, and energy costs.
However, many employers will also feel the effect of the pay increases in other ways. Many have voiced concerns over higher wage bills and the risk of financial uncertainty for smaller businesses.
Employers should now update their payroll systems and documents to reflect the new rate increases. They should also assess the impact this will have on their business. If necessary, consider your ability to keep staff on, and the need to restructure or make redundancies to make savings now.
If you require any assistance with updating payrolls, assessing the impact on your business - or any other HR, Health & Safety, or Legal matter, please do not hesitate to contact the Quest Cover Advice Line on 01455 852 028.
