National Minimum Wage and National Living Wage increases April 2022

On the 21st October 2021, the UK government indicated approval of the Low Pay Commission recommendation for the uplifting of minimum pay rates within the United Kingdom – these new minimum rates apply for pay periods commencing on or after 1st April 2022.

The National Living Wage (NLW) increases to £9.50, a 6.6% rise. With the future intention of reducing the starting qualifying age for NLW to 21, in the interim the age 21-22 rate is increased by 9.8%.

The other significant proposal is to increase the Apprenticeship rate by 11.9% to rise and match your 16-17 year old rate at £4.81. Significantly some employers have been found to be paying Apprenticeship rates after it’s time limit of 1 year, and more significantly where no actual Apprenticeship exists. Just because an employee or worker is called an apprentice and their job an apprenticeship, if there is no actual training and agreement in place, then standard NMW rates are due.

NMW/NLW not as easy as you may think

National Minimum pay is not about the employee hourly pay rate, but about the hourly rate received after any relevant reductions, and deductions for the benefit of the employer.

Important factors are the accurate recording of working time as defined by NMW law and the treatment of certain working expenses, such as ‘uniform’.

Timing of work and payment is also critical. Some amounts of pay do not count towards NMW pay such as the premium element of overtime.

Absence is not counted as working time and operation of Time Off In Lieu comes with some legal timing issues.

It is possible for employees with hourly pay rates above perceived minimums (including the Living Wage foundation rates) but yet are in reality using the relevant regulations, paid below the required National Minimum and Living Wage rates applicable.

PAYadvice.UK 26/10/2021 updated 27/10/2021

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