National Minimum Wage to Increase on April 1st – Are You Getting a Pay Raise?

The government announced new national minimum wage changes on 21 November 2023, and they are just days away from coming into effect. This article delves into the announced changes, drawing comparisons with previous increments. Additionally, it provides guidance on verifying entitlements and explores the implications for employers who fail to comply.

Join us as we navigate the upcoming adjustments, offering insights into their ramifications for employees and employers. If you have any questions about the evolving landscape of wage regulations or believe your rights have been breached, contact us now.

Redmans Solicitors are employment law specialists and could discuss your case before advising on your possible next steps.

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What are the National Minimum Wage Changes?

Significant changes regarding minimum wages in the UK will take effect on 1 April 2024. These adjustments aim to ensure fair compensation for workers across various age groups. First, the national living wage will increase its hourly rate, rising from £10.42 to £11.44. This wage will be extended to individuals aged 21 and over, beyond its previous threshold of 23 plus.

In addition, national minimum wage rates will undergo adjustments of their own. Workers aged 18 to 20 will see their hourly wage rise from £7.49 to £8.60, representing a substantial increase in earnings. Similarly, individuals under 18 or those engaged in apprenticeships will benefit from an enhanced hourly rate, climbing from £5.28 to £6.40.

The “Largest Ever Cash Increase”

When the Government announced these changes to the national minimum wage rates, it called them the “largest ever cash increase.” And they aren’t wrong, as this is the first time the rate has been boosted by more than £1. 

From 2022 to 2023, the national living wage elevated from £9.50 to £10.42, showing an increase of 92p. The year before that, it was uplifted by 59p and was only available to those aged 25 and over.

Similarly, the national minimum wage rates for apprentices this year were boosted by £1.12 per hour. Comparatively, from 2022 to 2023, their wage only saw a raise of 47p, and the year before that, 51p.

As such, it’s clear the Government has taken the recommendations from the Low Pay Commission on board. Many will welcome this, as factors including COVID-19, the war in Ukraine, and Brexit have influenced the cost of living crisis many currently are affected by.

Review Your Payslip to Identify Payment Issues

With the forthcoming national minimum wage boosts, employees must check they are getting paid the right amount. Most will, as their employer is likely already on top of it. However, some employers may be less organised or attempt to avoid the increased rates.

To check the pay an employee is receiving, they can revert to their employment contract or review their payslips. Payslips should be issued on or before the employee’s payday. This will enable the employee to check they will receive the correct rate and resolve any issues before they’re paid.

Employer Repercussions for National Minimum Wage Non-Compliance

By law, employers must pay their employees at least the national minimum wage. If an employer identifies that they haven’t done so, they must correct this promptly. 

Supposing employees learn they haven’t received their minimum legal entitlement, they should first raise the issue informally with their employer. Typically, the employer would have done this accidentally and would resolve the matter swiftly to avoid penalties. 

However, employees could raise a formal grievance if the employer fails to rectify the problem. Should the matter remain unresolved, they could complain to HMRC or make a claim to an employment tribunal.

Yet, employers generally seek to avoid formal action, as this could result in hefty penalties. If HMRC get involved and identify national minimum wage non-compliance, among other things, they could:

  • Issue a notice, ordering the employer to pay the employee monies owed, going back a maximum of six years
  • Issue a fine, capped at £20,000, which at minimum would be £100 per affected employee
  • Take legal action, which could include initiating criminal proceedings

Should the matter be taken to an employment tribunal, the employer could be ordered to pay damages to the employee. This would depend on the case’s factors, and strict deadlines must be met to file a claim. The employee must choose one route, though, as they cannot go to both HMRC and a tribunal.

If you have any questions about the imminent national minimum wage changes or believe your employer is breaching your rights, contact Redmans Solicitors now. Following a short consultation, we can discuss whether your case is eligible to claim compensation.

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