In April 2023, there will be an increase to the National Minimum Wage. In this article we will explore the increase, what it means for your business and the differences between the National Minimum Wage and National Living Wage.
What Is The Minimum Wage?
It is important to understand the differences between the ‘National Living Wage’, the ‘National Minimum Wage’ and the ‘Living Wage Foundation’.
National Living Wage (NLW)
The ‘National Living Wage’ applies to people aged 23 or over and is set by the government every year.
Living Wage Foundation
The ‘Living Wage Foundation’ is the organisation at the heart of the independent movement of businesses and people that campaign for the idea that a hard day’s work deserves a fair day’s pay. The Living Wage Foundation is set at a higher £ value than the governments National Minimum Wage and National Living Wage and they claim it is ‘the only UK wage rate that is voluntarily paid by almost 9,000 UK businesses who believe their staff deserve a wage which meets everyday needs’
Read more at https://www.livingwage.org.uk/
Annual changes to rates of pay
Each year the Government set the National Living Wage and National Minimum Wage. This typically comes into effect on the 1st April annually and is based on the age of an individual and whether you are an Apprentice or not.
We have detailed the current rates of pay applicable to 31st March 2023 from the https://www.gov.uk/ website, correct as of 16th January 2023.
It is important to note that Apprentices are entitled to the apprentice rate if they are either:
- Aged under 19
- Aged 19 or over and in the first year of their apprenticeship
- The apprenticeship rate does not apply to Higher Level Apprenticeships.
Should I just pay the minimum wage?
Whilst we appreciate cash flow is fundamental to every business, it is also important businesses recognise the contributions made by an employee. Where would you be without them?
Simply paying the minimum wage might feel like you are keeping costs to a minimum, but how does the employee feel about this arrangement?
The current financial climate in the UK is affecting everyone, including your staff. The additional stress of the cost of living crisis is causing employees to want salary increases as well as recognition. As an employer, you should recognise all factors that may be affecting your workforce and evaluate your wage structure.
To find out more about wages, bonuses, commission structures, and employee retention programs, contact our team who will be able to share ideas with you.
Find out more information about the Minimum Wage Increase on the Gov website here.
Call for HR Help and Support
Employment Law can be complicated and we would advise any employer that is unsure what the Minimum Wage is and how it applies to employees or apprentices, to contact us and check first.
At NORI HR and Employment Law we take away the stress and uncertainty of HR and Employment Law. You can contact us on 01254 947829 or view our HR Consultancy plans here,