Wage Changes to Look Out For From April 2024

The cost of living crisis meant that a wage change was on the horizon, but it’s finally here. High inflation and economic pay growth have influenced the biggest National Living Wage (NLW) increase ever. 

Below, we explore the new pay rates and other payroll changes before outlining how employers can comply. Finally, we discuss the repercussions employers face should they fail to comply with the changes.

If you have any questions about the wage change or feel your rights have been breached, contact us today. Redmans Solicitors are employment law specialists who could uncover your compensation eligibility. Get in touch with us now by:

What is the Wage Change?

From 1 April 2024, the NLW will increase by £1.02 to reach £11.44 per hour. This wage change is a 9.8% enhancement and represents the first time the NLW has risen by over £1. Moreover, those aged 21 and 22 will now be entitled to the NLW. Previously, this pay rate was only available to those aged 23 and older.

Yet, changes to the NLW aren’t the only ones for employers to look out for. That’s because changes to other National Minimum Wage (NMW) rates are coming, too. Individuals aged 18 to 20 will see their pay rates increase by 14.8% to £8.60 per hour. 

Furthermore, 16 to 17-year-olds and apprentices will see a rise of 21.2%, equating to £6.40 per hour. Finally, accommodation offset will increase by 9.8% to £9.99 per hour.

Other Payroll Changes to Look out for

The 2024 wage change will also see other payroll revisions that employers must be informed about. Firstly, employers must be familiar with various changes concerning holiday pay. 

One such change concerns rolled-up holiday pay for seasonal and irregular (zero-hour contracts) workers. From 1 April, these workers will be able to have their holiday pay rolled up in the new year. A cap of 28 days, paid at 12.07% of an employee’s basic hourly wage, could be added to their pay. This would account for their holiday pay and wouldn’t be affected by when they took their annual leave.

Furthermore, from 1 January, additions to an employee’s wage, such as commissions and bonuses, will influence their holiday pay entitlement. Employees will also be able to carry over unused holidays arising from maternity, family or sick leave. The same would apply if an employer prevented an employee from taking their holiday entitlement.

Moving on, the wage change will also see improvements to working parents’ rights. From October, parents of babies in neonatal care will receive up to 12 weeks of leave in addition to their current parental entitlement. In such circumstances, eligible parents will be entitled to the same pay received under their maternity or paternity policy.

Employer Tips to Remain Compliant with the Wage Change

With all the revisions concerning pay following the wage change in 2024, employers must take steps to remain compliant. Firstly, employers must keep up-to-date employee records and update their payroll systems accordingly. This is particularly important if an employee’s age is close to a new NMW threshold.

Moreover, it’s crucial to remember that the NMW rates apply to all employees, not just those paid hourly. Therefore, if an employee receives a ‘salary’, the employer must ensure the breakdown equals or exceeds the appropriate NMW rate.

Thousands of Pounds of Repercussions

Should an employer fail to adhere to the revisions brought about by the wage change, they could face legal action. One such penalty includes employers receiving a fine of up to £20,000 per employee whose rights have been breached. However, the repercussions could consist of non-financial penalties, like disqualifying an individual from being a director.

As such, it’s vitally essential employers understand the above changes and take the appropriate action. With some changes already in place and others just around the corner, employers will have to act fast.

Contact Redmans Solicitors now if you want to learn more about the wage change or feel your rights have been breached. Following a consultation, our team of employment law specialists could assess your circumstances and advise on your possible next steps. So, to begin your journey with us today: