National Minimum Wage Increase

On 21 November 2023, the Chancellor announced the Autumn Budget and with it the latest changes to the national minimum wage.

What is the minimum wage?

The minimum wage, which in recent times has been known as the National Living wage, varies according to the age of the employer. This figure is updated every April. From the 1 April 2024 the following rates will apply:

• For over-23s: £11.44 per hour (increased from £10.42)
• For 21-22: £11.44 per hour (increased from £10.18)
• For 18-20: £8.60 per hour (increased from £7.49)
• For under 18s: £6.40 per hour (increased from £5.28)
• The Apprentice rate: £6.40 per hour (increased from £5.28) – this rate applies to those under 19 or people over 19 in the first year of their apprenticeship.

This is the largest ever cash increase to the figure.

The consequences

If businesses don’t pay the minimum wage then they can be fined. In the summer of 2023, the Government announced that 200 businesses had been fined for not paying the minimum wage.

These fines totalled £7m and 63,000 workers were reimbursed for these breaches which dated back over 10 years.

WH Smith holds the baton for being the worst offender. They didn’t pay more than £1m to approximately 17,600 workers.

We have published a guide to help employers ensure that they don’t inadvertently pay less than the national minimum wage, which will be especially relevant when the increases take effect on 1 April 2024.

You can find the guide here: Do you comply with the National Minimum Wage? (NMW) (wilsonbrowne.co.uk)

Who isn’t entitled to it?

Those who don’t qualify for the wage are:

• Self-employed
• Company directors
• Volunteers
• The armed forces
• Religious workers

Prisoners are paid at a minimum of £4 per hour for work done and those students who are on a work placement year are not entitled to be paid anything.

What is the ‘Real Living Wage’?

This is slightly different from the National Minimum Wage but is worth a mention:

• This is set by the Living Wage Foundation.
• This is higher than the National Living Wage and reflects what the Foundation believes people need to earn to cover their everyday living needs.
• This is a voluntary rate.
• More than 430,000 people across the UK benefit from this.

It is currently set at £13.15 an hour in London and £12 elsewhere in the UK.