National Minimum Wage

On 1st April 2024, the rates of National Minimum Wage (NMW) were increased. In addition to this NMW was extended to domestic live in workers for the first time, whilst the National Living Wage (NLW), which is a higher rate of pay than NMW was also extended to workers aged 21 for the first time.

The NMW updates coincide with an increase in the weekly rates for statutory payments such as Statutory Maternity Pay (SMP) and Statutory Adoption Pay which come into force on 7th April 2024.

What are the changes to the National Living Wage and the National Minimum Wage?

From 1st April 2024, workers aged 21 and over will be entitled to the National Living Wage (NLW), which increased to £11.44 per hour. Workers aged 18-20 are now entitled to the National Minimum Wage (NMW) f £8.60 per hour and workers aged 16-17 are now entitled to £6.40 per hour. The changes also include apprentices under 19 years old or aged 19 and over but who are in the first year of their apprenticeship, who are now entitled to £6.40 per hour.

Who should be paid the National Living Wage and the National Minimum Wage?
All employees and workers are entitled to the national minimum wage (NMW). The rate payable depends on the individual’s age and whether they are in training or doing an apprenticeship.

When can I start applying the new rate of NMW and NLW?
NLW/NMW should be paid in line with the pay reference period for the work completed. The pay reference period refers to the intervals at which you pay your workers i.e. daily, weekly, monthly. This means that, of a worker is paid weekly, the previous NMW rate will apply until the start of the next pay reference period. Payment made in relation to work completed in a pay reference period starting from the 1st of April 2024 will be subject to the NMW uplift.

What should I do if I have miscalculated a worker’s pay and paid them less than NMW/NLW?
If you realise you have made an error and underpaid a worker, you should recalculate their pay and pay them the shortfall as soon as possible. Failure to pay a worker NLW/NMW is a breach of a worker’s contract will result in an unlawful deduction from their pay. Workers are entitled to bring claims in the Employment Tribunal and to lodge complaints with HMRC for breaches of NLW/NMW, therefore a failure to correct an NLW/NMW underpayment could lead to a HMRC investigation and/or an Employment Tribunal claim against your business.

Credit: REC