The Government has announced the National Living Wage (NLW) and National Minimum Wage (NMW) increases which will take effect in April 2021 following the acceptance of the recommendations made by the Low Pay Commission at the end of October. For the first time ever the National Living Wage will apply to 23 and 24 year olds. The Low Pay Commissioner’s remain committed to the Government’s goal of ending low pay and have not recommended any changes to the Government’s target of the NLW reaching two-thirds of median earnings by 2024.
The new rates for the National Living and Minimum Wage which increase on 1st April 2021, have been published as:
|
Age |
2019/20 Rate of Pay from 1st April 2020 |
2020/21 Rate of Pay from 1st April 2021 |
|
23+ (formerly 25+ |
£8.72 |
£8.91 |
|
21-22 (formerly 21-24) |
£8.20 |
£8.36 |
|
18-20 |
£6.45 |
£6.56 |
|
16-17 |
£4.55 |
£4.62 |
|
Apprentice |
£4.15 |
£4.30 |
Apprentices are paid the apprentice rate if they are aged 19 and under or if they are aged 19 but in the first year of their apprentice. After that they would go onto the National Minimum Wage rate. Employees must be of school leaving age 16+ to receive the National Minimum Wage.
As an employer these minimum amounts are a legal requirement and you could be fined if you fail to implement them by HMRC. You are also at risk of receiving an employment tribunal claim for unlawful deduction of wages or breach of contract. You must keep adequate records of all payments so that you can demonstrate compliance with the national minimum wage rules. Of course, don’t forget to write to your staff confirming their pay increase!
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