The government recently announced a 9.7% increase in the National Living Wage (applicable to those who are at least 23 years of age) from £9.50 an hour to £10.42 an hour, effective from 1 April 2023. In addition, considering the recommendations of the Low Pay Commission, increases in minimum wage rates for those who have not reached the age threshold for National Living Wage were also confirmed by the government as follows:
| Category | Rate from April 2023 | Current Rate | Increase % |
| National Living Wage | £10.42 | £9.50 | 9.7% |
| 21 – 22-Year-Old Rate | £10.18 | £9.18 | 10.9% |
| 18 – 20-Year-Old Rate | £7.49 | £6.83 | 9.7% |
| 16 – 17-Year-Old Rate | £5.28 | £4.81 | 9.7% |
| Apprentice Rate | £5.28 | £4.81 | 9.7% |
Rates of work-related statutory payments for maternity, paternity, shared parental leave, adoption, parental bereavement and sickness are also set to increase from April 2023.
Whilst statutory maternity pay, statutory paternity pay, statutory shared parental pay, statutory adoption pay and statutory parental bereavement pay are set to increase from the current rate of £156.66 per week to £172.48 per week in April 2023 and statutory sick pay is set to increase from the current rate of £99.35 per week to £109.40 per week. However, it must be noted that there are minimum earning thresholds to be met in order to qualify for these payments.
For some employers, the increase in payments will place additional burdens where they are already struggling to meet the costs of running their business. If you are a business owner who is worried about the impact of the rising rates, we would recommend that you seek advice as early as possible, prior to the changes coming in. Our expert legal advisors can work with you to put a plan in place to manage this in the right way. We can guide you through:
- How to safely make changes to terms and conditions
- Reducing hours to bring down the wage bill or;
- As a very last resort, how to initiate a redundancy process where there are no other options.
It is a worrying time for many and that’s why we are in your corner to navigate the changes in a way that’s right for you.
If you are an employer or employee with questions relating to any of the above, you can contact Bhayani HR & Employment Law for advice.
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