Employers are now familiar with and prepared for the annual increase to National Minimum Wage rates which comes into effect at the start of the financial year; however you should be aware of a further change this year which could catch out the unwary.
With effect from 6th April the age limit for the highest national minimum wage rate – the National Living Wage - will change. Since its introduction in 2016 workers aged 25 and over have been entitled to National Living Wage. This year will see a drop in that age limit to 23 years old, and so workers between the age of 23 and 25 will become entitled to move onto the higher rate with effect from 6th April. This particular age group will benefit from a significant increase in their entitlement, from £8.20 per hour to £8.91 per hour.
The pay rates for each band of national minimum wage will also increase again this year, although rises this year are lower than they have been in previous years in recognition of the burden that Covid19 has placed on employers, and NMW rates will be:
|Age Band||2020/21 Rate||New Rate for 2021/22|
|National Living Wage||£8.72||£8.91|
|21 to 22 Years||£8.20||£8.36|
|18 to 20 years||£6.45||£6.56|
|Under 18 years||£4.55||£4.62|
If you have any further enquiries relating to National Minimum Wage, or any other employment matter please do not hesitate to contact David Morgan or another member of the Employment Law team.