On 17 November 2022, the UK Government announced increases to the National Living Wage (NLW) and National Minimum Wage (NMW). These will take effect from 1 April 2023. The increases aim to improve the standard of living for low-paid workers, ensuring that they receive a fair wage. With the current cost of living crisis, the timing of this couldn’t be better with many people struggling to pay bills or survive on universal credit.
Pay increases will be awarded to many types of employees, including those who are employed full-time, part-time, temporary, or through an agency. Those who are under the age of 19 or in their first year of apprenticeship (and aged 19 or higher), will get a lower increase in pay based upon apprentice rates.
New rates for National Minimum Wage
National Minimum Wage rates are divided into three categories based on age. The increased minimum hourly rate that employers are required to pay workers between the ages of 16 and 22 per hour is as follows:
- 21-22-year-old: from £9.18 to £10.18 per hour (an increase of 10.9%)
- 18-20-year-old: from £6.83 to £7.49 per hour (an increase of 9.7%)
- 16-17-year-old: from £4.81 to £5.28 per hour (an increase of 9.7%)
New rates for National Living Wage
The National Living Wage which is the minimum hourly wage that employers are required to pay to workers who are 23 years old or older, will also increase from £9.50 to £10.42 per hour (an increase of 9.7%).
Furthermore, in 2024, the minimum age threshold for the NLW will be lowered from 23 to 21 years old, so closing the gap between ages.
You can learn more about the differences between the NMW and NLW in our blog here.
These increases are expected to have a positive impact on low-paid workers, particularly in industries such as catering, retail, and social care, where many people are paid the minimum wage. The higher rates should also help address the issue of in-work poverty, which has been a growing concern in recent years.
The impact upon employers
However, some businesses may struggle to absorb the increased wage costs, particularly in sectors with already tight profit margins. This could lead to employers facing higher costs to run a business and having to make tough decisions, such as reducing staff hours, cutting jobs, or increasing prices paid by customers.
Here for you
Our website is full of useful information and we are always available at the end of the phone if you wish to discuss anything recruitment related in more detail.
For candidates – check out our candidate downloads and blogs for useful information. Alternatively, you can search for suitable jobs here.
For clients – You can find full details of our disciplines and sectors here. Get in touch if you would like to discuss your staffing requirements with the team at CMD. No matter the size of your organisation, our expert help is available.
You will find our contact details on our website should you wish to get in touch.
