Real Living Wage rise – what about the impact on Statutory Maternity Pay

With the real Living Wage and London Living Wage announced 10% rise on the Tuesday 24th October 2023 – real Living Wage employers have a six month window to apply the rise (if current hourly rates are below) by 1st May 2024. Accredited employers choose the date of change within the six month window allowed.

As with any pay increase position including any government announced increase for the National Minimum Wage (NMW) and National Living Wage (NLW), if these changes result in an increase in earnings, then under the Alabaster ruling the earnings amounts used for the calculation of earnings used for Statutory Maternity Pay (SMP) require review with any resulting increase applied to the payment of backdated or increased SMP.

For more details on the impact see the PAYadvice article Pay rises and the impacts on Maternity – the curse of Alabaster.

The Chancellor of the Exchequer and associated ministers are soon to announce significant increases to the NMW/NLW rates. These may impact historic SMP payments.

PAYadvice.UK 4/11/2023 updated 6/11/2023

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