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New Minimum Wage and Employment Rates - Effective 1/4/24!

ARE YOU READY FOR THE INCREASE IN THE LEGAL MINIMUM WAGE?

From 1st April 2024, the legal minimum wage will increase for apprentices and across all bands to the amounts shown below. The top rate will also now apply to everyone over 21 and above (previously 23 and above).

  • The National Living Wage: aged 21 and over, the rate is increasing to £11.44 an hour from £10.42

  • Those aged between 18-20 will receive £8.60 an hour from £7.49

  • 16 and 17 year olds will receive £6.40 an hour from £5.28

  • Apprentices under the age of 19 or in their first year £6.40 an hour, from £5.28

As an employer when assessing your worker’s wages, its important you don’t forget about those on a salary. It is easier to see those on an hourly rate that needs increasing, but do you know the equivalent hourly wage of those on a salary? Based on £11.44 an hour, working 37.5 hours a week is the equivalent of a £22,308 annual salary. Or based on 40 hours for the same rate, would be £23,795.20. How do your workers salaries compare?

The legal minimum wage isn’t optional, you will be breaking the law if you don’t pay your workers the minimum they are entitled to. Wages can’t be topped up with tips or overtime. Payments for uniform or safety equipment shouldn’t take workers below the minimum wage. There are a small amount of roles where the legal minimum doesn’t apply, those who don't qualify include:

  • the self-employed

  • company directors

  • volunteers

  • members of the armed forces

  • people living and working in a religious community

  • prisoners

Those with disabilities or in long-term unemployment who take part in government work programmes are paid fixed amounts at different stages of the scheme. These are less than the equivalent National Minimum or Living rate.

Employees who carry out domestic work whilst living with their employer will, for the first time, become entitled to the appropriate legal minimum wage for their age.

Employers must pay these increased rates starting from the worker’s next pay reference period after the raise.

From April 2024, there will also be increases in the statutory amount employees receive if they are off work due to sickness or where they are taking family related leave:

  • From 6 April, Statutory sick pay will increase to a weekly payment of £116.75 (up from £109.40)

  • From 7th April, Statutory maternity pay – those who qualify are entitled to receive it for 39 weeks at a rate of 90% of their gross weekly pay per week, subject to a maximum of £184.03 per week (up from £172.48 per week) after the first 6 weeks.

  • From 7th April, Statutory Paternity Pay – the smaller of £184.03 per week (up from £172.48 per week) or 90 per cent of their average weekly earnings per week

  • From 7th April, Statutory Shared Parental Pay – the smaller of £184.03 per week (up from £172.48 per week) or 90 per cent of their average weekly earnings per week

  • From 7th April, Statutory Adoption Pay – those who qualify are entitled to receive it for 39 weeks at a rate of 90% of their gross weekly pay per week, subject to a maximum of £184.03 per week (up from £172.48 per week) after the first 6 weeks.

  • From 7th April, Statutory Parental Bereavement Pay – the smaller of £184.03 per week (up from £172.48 per week) or 90 per cent of their average weekly earnings per week

  • From 8 April, Maternity allowance will increase to £184.03

The average gross weekly earnings required to qualify for Statutory Maternity Pay and these other family friendly payments remains at £123.00 or more.

From 6 April 2024, the following maximum compensation limits are also going up:

  • The limit on a week’s pay will increase to £700 from its current rate of £643 (used to calculate statutory redundancy and other payments)

  • The maximum statutory redundancy payment will increase to £21,000 (service is capped at 20 years’ service)

  • The maximum basic award for unfair dismissal will increase to £21,000 and the maximum compensatory award for unfair dismissal will increase to £115,115 (this only applies for dismissals that take effect from 6 April 2024)

For the full list of rates and thresholds for the 2024/25 year, please click here.