The National Minimum Wage – Don’t get caught out by April’s changes

More than 200 employers were named and shamed by the Government at the end of 2021 for failing to meet the National Minimum Wage (NMW).

The employers that underpaid workers did so in the following ways:

  • 37 per cent – Deductions that reduce minimum wage pay, for example, workers out of pocket to comply with the dress code
  • 29 per cent – Unpaid working time, such as mandatory training, trial shifts or travel time
  • 16 per cent – Failing to pay the correct rate to apprentices
  • 11 per cent – not increasing NMW pay in line with Government increases or paying the wrong minimum wage rate based on a person’s age.

From April, employers must be ready for changes to the National Minimum Wage rates when managing their payroll and setting remuneration to avoid similar mistakes and penalties.

It was revealed last year that the National Living Wage (NLW) will increase to £9.50 an hour as of 1 April.

Announced a few days before the Autumn Budget, the rate will increase by 59p per hour from the current rate of £8.91.

It has been estimated that this will mean that the lowest-paid workers will see their annual income rise by £1,000.

The other National Minimum Wage (NMW) will increase to at the same time at the following rates:

  23 and over 21 to 22 18 to 20 Under 18 Apprentice
April 2021 (current rate) £8.91 £8.36 £6.56 £4.62 £4.30
April 2022 £9.50 £9.18 £6.83 £4.81 £4.81

To avoid a potential penalty or being named or shamed for non-compliance please make sure your payroll processes are up to date to account for these changes, including accounting for employees change in age, training and deductions. If you have any queries, then please contact us.