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It’s that time of year again when employers need to get ready to adopt the increase in the National Minimum Wage or National Living Wage.
Younger age group to benefit!
“Those aged 21 to 22 years are set to benefit the most with a 10.9% pay rise, which will need to be accommodated for in the wage bill.”
This age group will benefit from a rise of £1.00 per hour. Based on a 40-hour working week this means a gross annual wage increase of £2,080.00.
Hourly wage change!
The following changes to the minimum wage hourly rates will take effect from 01 April 2023:
Age Groups | Current Rate: 2022/2023 | New Rate: 2023/2024 |
23 or over | £9.50 | £10.42 |
21 to 22 | £9.18 | £10.18 |
18 to 20 | £6.83 | £7.49 |
Under 18 | £4.81 | £5.28 |
Apprentices | £4.81 | £5.28 |
Getting it wrong!
“It pays to get it right. HMRC will take action;
and will publicly name and shame employers in breach.”
The minimum wage is enforced by HMRC, which can include service of notices of underpayments and penalties, “naming and shaming”, recovery of underpayments through litigation and criminal prosecutions.
Workers can bring claims for unlawful deduction of wages in the employment tribunal.
Did you know?
“ Surprisingly not all minimum or living wage increases apply from 01 April.”
While the increase to the minimum or living wage rates happens on 01 April each year, the new rates apply from the next pay reference period. This means the pay increase may not be immediate.
For example, if the worker is paid on 25th of each month, they will be paid the old rate until 25 April; the new rate will apply from the start of the new pay reference period on 26 April.
Is your business compliant?
To ensure your business is compliant there needs to be a thorough understanding as to what constitutes working time for the purpose of establishing if your business is paying its workers the correct wage.
Time spent actually working is clearly identifiable but what about time spent travelling, training or “on-call”? Do you understand the legal position and how to approach these issues?
FGS are experts in helping its clients safeguard their business from legal, financial and reputational risks so they have greater certainty over their commercial outcomes.
If you require further guidance about the impact the above changes will have on your business or minimum or living wage compliance, please feel free to call us on 0808 172 9322 for a no obligation discussion.
WELCOME TO A MORE CONFIDENT FUTURE!
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This update is for general guidance only and advice should be taken in relation to a particular set of circumstances.