National Minimum Wage and National Living Wage rates

Changes regarding the rules of who receives National Living Wage and National Minimum Wage, the new rates and guidance on preparation for them coming into effect (from 1st April 2024)

Published Categorised as Employment Law Tagged
National Minimum Wage National Living Wage 2024 - LighterHR
National Minimum Wage National Living Wage 2024 - LighterHR

Changes regarding the rules of who receives National Living Wage and National Minimum Wage, the new rates and guidance on preparation for them coming into effect (from 1st April 2024).

1. Current Rules for National Minimum Wage and National Living Wage

The minimum wage a worker gets depends on their age. The top tier of £10.42 is given to workers aged 23 years and over.

The National Minimum Wage is paid to employees up until the age of 23.  From 23 onwards, individuals receive the National Living Wage.

2. What Is Changing?

The first change is that, from 1st April 2024, employees will receive the National Living Wage from the age of 21.

The second change is the rate of pay. 

As of 1st April 2024:

  • the National Living Wage (paid to employees who are 21 and older) will increase to £11.44
  • the National Minimum Wage (paid to employees who aged between 18 and 20) will increase to £8.60. 
  • There are also increases for apprentices and employees who are under 18.

The old and new rates for National Living Wage and National Minimum Wage are:

Wage BandsApr 2023April 2024
National Living Wage (23 and over)£10.42£11.44
National Living Wage (21 – 22)£10.18£11.44
National Minimum Wage (18 – 20)£7.49£8.60
Under 18 but above school leaving age£5.28£6.40
Apprentices aged 19 and over in 1st year of apprenticeship£5.28£6.40
Apprentices aged under 19£5.28£6.40
National Living Wage and National Minimum Wage Rate Changes

3. Actions an Employer Should Take Regarding Changes to Minimum Wage Rates

The increase in the National Minimum Wage and National Living Wage is seen as a positive step by the government to support the current cost of living crisis affecting workers across the UK. However, many businesses have been impacted by the challenging economy, and these increases could create financial issues.

Therefore, employers must consider preparing early for this increase. They need to consider calculating their staffing costs using the new rates to establish any risks to profit margins. They can then assess how best to mitigate those risks i.e. cost cutting measures and increase in prices could help.

Businesses of all sizes can prepare for this new employment law by ensuring that their finance, payroll, and HR departments are fully aware of the new rates. This is especially important if you have or are planning to bring an apprentice on board or if your employees are paid an hourly as opposed to an annual salary.

If you would like any help updating your contracts, policies or handbook or have any specific questions on how this change relates to your business, please do contact us.

Read the full list of employment law changes for 2024, with individual posts on each topic, providing all the information you need.

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