As of April 2023, the national living wage (NLW) and national minimum wage rates (NMW) will increase. The new NI rate will be as follows:
Age Group Hourly NI Rate (April 2023)
23 & over £10.42
Under 18 £5.28
The NLW will now apply to those aged 23 and over (previously only for those aged 25 and over), with an increase in hourly rate to £10.42. The accommodation offset will also increase to £9.10 per day. Other statutory rates from April 2023 include:
Statutory Payment Weekly NI Rate (April 2023)
Shared Parental £172.48
Parental Bereavement £172.48
Statutory Sick Pay (SSP) £109.40
More information on the NMW
It is important to note that the NLW/NMW applies to every pay period. For example, if a worker is paid weekly, they must receive at least the minimum wage for the hours worked in a week, and if they are paid monthly, it must apply on average to the hours worked in that month. Higher earnings in one pay period cannot balance out earnings below the minimum wage in the next.
Employers who fail to pay the NMW can face serious consequences. They may be required to pay the missing wages to their workers, as well as fines of up to 200% of the underpayment (capped at £20,000 per worker). Employers may also be named and shamed by the government. Naming and shaming involves publishing the names of employers who have failed to pay the national minimum wage. The government can also issue a press release, and the employer’s breach may be reported in the media. Last year, HMRC recovered £16.8 million arrears for 155,000 workers and issued 696 penalties of £13 million.
Paying the national minimum wage can have several advantages for employers. Firstly, it can attract and retain a skilled and motivated workforce, promote compliance with employment law, and support ethical and responsible business practices. Additionally, employers can seek HR support services to ensure they are complying with national minimum wage legislation. HR support services can offer advice and guidance on the changes to the national minimum wage rates and how to develop a salary and benefits strategy compliant with the new regulations. Furthermore, HR support services are available for commercial companies, charities, and not-for-profit organisations.
FAQs about the National Minimum Wage
What is the national minimum wage?
The national minimum wage is the minimum amount that employers must pay their workers. However, the rate varies depending on the worker’s age and whether they are an apprentice.
Who is eligible for the national minimum wage?
Most workers are entitled to the national minimum wage, including full-time, part-time, temporary, and agency workers. Some groups, such as self-employed people, volunteers, and company directors, are not entitled to the national minimum wage.
How is the national minimum wage calculated?
The national minimum wage is calculated based on the worker’s age and whether they are an apprentice. The rates are reviewed annually by the government.
What happens if an employer doesn’t pay the national minimum wage?
Employers who fail to pay the national minimum wage can face serious consequences. They may be required to pay the missing wages to their workers, as well as fines of up to 200% of the underpayment (capped at £20,000 per worker). Employers may also be named and shamed by the government.
What is the accommodation offset?
The accommodation offset is the maximum amount that an employer who provides live-in accommodation to their staff can deduct from their workers’ pay. From April 2023, the accommodation offset will increase to £9.10 per day. It’s important to note that an offset is not allowed for utilities, council tax, uniforms, tools, or anything else.
In conclusion, more information can be found on the government website here, including more details of the rates mentioned above. If you need advice on the new NMW rates please get in touch using the form below.