As of April 2022, the National Living Wage (NLW) Increases
Are you aware of the increases announced in the rates for the National Living Wage and National Minimum Wage?
As of April 2022, the National Living Wage (NLW) increases from £8.91 an hour to £9.50.
National Minimum Wage rates will also increase for lower age brackets:
- 21-22 year olds from £8.36 to £9.18 per hour
- 18-20 year olds from £6.56 to £6.83 per hour
- 16-17 year olds from £4.62 to £4.81 per hour
Apprentices aged under 19 or over 19 and in first year of their apprenticeship, will see their rate rise from £4.30 to £4.81 per hour.
Statutory maternity pay and other associated rates
From 3rd April 2022, the weekly rates of statutory maternity pay, statutory paternity pay, statutory adoption pay and statutory shared parental pay increase from £151.97 to £156.66.
Statutory sick pay and statutory parental bereavement pay
From 6th April 2022, the weekly rate will increase from £96.35 to £99.35 for statutory sick pay. From 3rd April 2022 statutory parental bereavement pay will rise from £151.97 per week to £156.66 per week.
Statutory redundancy payments and unfair dismissal awards
These will also increase, as long as the effective date of termination is on or after 6th April 2022.
The increases are:
- Maximum amount of a week’s pay: rising from £544 to £571
- Maximum basic award/ statutory redundancy payment increasing from £16,320 to £17,130
- Maximum amount of an unfair dismissal compensatory award: rising from £89,493 to £93,878
Considerations for employers
It is important for employers to note that the increases won’t just be limited to hourly paid employees, as the higher rates brings salaried employees closer to the minimum. Following the increases, the minimum annual salary for a worker aged over 23 on a 40-hour week for example will be just under £20,000 annually.
It is especially important for those employers which operate salary sacrifice schemes, for example pension contributions. Employees must not be allowed to sacrifice their pay to below the NMW. Employers should try to ensure that their payroll systems have measures in place to prevent this from happening.