National Minimum Wage and National Living Wage

The government has confirmed all the new statutory rates from April 2024. Below, we outline what these are and other important changes your client needs to know about.

Statutory rates and national minimum wage (NMW) and national living wage (NML) are reviewed annually, and usually increased. The dates from the which the increase applies from can change from year to year, and care should be taken to ensure they are applied correctly.

National Minimum Wage (NMW) and National Living Wage (NLW)

Age Rate from 1 April 2023 Rate from 1 April 2024
Workers aged 23 and over (NLW) £10.42
Workers aged 21 and over (NLW) £11.44
21‒22-year-olds £10.18
18‒20-year-olds £7.49 £8.60
16‒17-year-olds £5.28 £6.40
Apprentices under 19, or over 19 and in the first year of the apprenticeship £5.28 £6.40

From 1 April 2024 your client should be aware that the NLW, the upper age band of NMW, will be expanding to include those aged 21. Your client will need to identify which of their employees are affected, so that they can be moved onto the NLW when necessary and avoid underpaying those workers.

In relation to your clients domestic worker, this arrangement must cease from 1 April 2024. Currently, where a worker is not a family member but is treated as such in relation to living space, meals, sharing of family tasks, and participation in leisure activities, doesn’t have to pay for food or lodging and does work that otherwise a family member would, they do not have to be paid NMW/NLW. However, this will no longer be available from 1 April 2024, and your client will need to make other arrangements for this worker including increasing their pay to at least NMW/NLW. They should remember, any deductions relating to accommodation or pay must be lawful. Subject to the accommodation offset, these deductions should not make the pay fall below NMW/NLW.

Alongside minimum wage increases, pay relating to statutory family related leave is also rising from £172.48 to £184.03 (including statutory maternity, adoption, paternity, shared parental and parental bereavement pay).

Your client should also know that statutory sick pay will also rise from 6 April 2024 from £109.40 to £116.75.
Finally, your client asked regarding the limit on a week’s pay for the purposes of redundancy calculations. This, along with other tribunal compensation limits, is set out below.

Payments From 6 April 2023 From 6 April 2024
Limit on a week’s pay for calculating redundancy and unfair dismissal basic award £643 £700
Maximum basic award for unfair dismissal and statutory redundancy payment (30 weeks’ pay subject to the limit on a week’s pay) £19,290 £21,000
Maximum compensatory award for unfair dismissal —subject to a maximum cap of a year’s pay £105,707 £115,115

To find out more about how this will affect your company and employees please contact your KKVMS advisor.