When Does the National Minimum Wage Increase in England and Wales?

It is a legal requirement to pay your workers the National Minimum Wage where they qualify for it. The National Minimum Wage is the statutory amount you must pay your workers and is set yearly by the Government. As the National Minimum Wage is subject to change annually, you must ensure that you are aware of the changes and comply with them. Not only is not paying the correct National Minimum Wage to your workers where they qualify for it illegal, it can also result in disgruntled workers entitled to take you to an employment tribunal. As it is illegal, you can also be taken to court by the Government. 

This article will explain when the National Minimum Wage will increase. It will explain what the National Minimum Wage is and who it applies to. It will also detail how much it currently is and when it will increase, including the future rates. 

What Does the National Minimum Wage Mean?

As an employer, you must pay a minimum wage to your workers who are at least school leaving age and who qualify for this. This is called the National Minimum Wage. School leaving age is the last Friday in June where the person will be 16 years old at the end of that school summer holiday. Your employees aged 23 years old or above are entitled to the National Living Wage. 

Workers entitled to the National Minimum Wage includes, for example:

• part-time workers;
• casual workers;
• zero-hours contracts;
• agency workers;
• apprentices;
• disabled workers;
• foreign workers; and 
• workers on probation.

Those not entitled to the National Minimum Wage are, for example, those who are self-employed, voluntary workers or company directors.

What Are the Current National Minimum Wage Rates?

The minimum wage rate depends on the age of your employer or worker.

Current rate:    Wage band:

When Does the National Minimum Wage Increase?

The National Minimum Wage in England and Wales increases every year following a review by the Government. The increase takes effect from 1 April, and there is no set amount that the National Minimum Wage rises each year. The increase of the National Minimum Wage for 1 April 2020 to 31 March 2021 to the National Minimum Wage for 1 April 2021 to 31 March 2022 was, for example, 7p for those aged 16 to 17 years old. 

In 2021, the Low Pay Commission, an independent advisory board, gave the Government recommendations on the National Minimum Wage from 1 April 2022. The Government accepted these and published them at the end of October 2021, displaying the new National Minimum Wage, which will take effect from 1 April 2022. 

This is as follows:

 Rate from 1 April 2022:             Wage band:

How Does an Employer Respond to the National Minimum Wage Increase?

As an employer, you must pay the correct amount for the National Minimum Wage, so you should know when the National Minimum Wage increases and its increased amount. If you do not pay the right amount, your worker can take you to an employment tribunal. Also, Her Majesty’s Revenue and Customs can take you to court.

When the National Minimum Wage increases, you must pay your workers the new increased rate. However, this does not apply precisely on the day of increase, the 1st of April each year. Instead, you are required to pay your workers the increased rate for the first pay reference period following the rise. A pay reference period for your workers could be, for example, daily, weekly, or monthly.

Key Takeaways

Paying your workers the correct National Minimum Wage is a legal requirement. Different rates apply depending on your worker’s age, so it is essential to make yourself aware of these rates. However, the National Minimum Wage rates increase yearly, and the new rates apply from 1 April onwards. Last year, the 1 April 2022 rate was announced in October 2021. The prior announcement can help you, as an employer, to be aware of the new National Minimum Wage rates and allow you to prepare for them. Getting the National Minimum Wage wrong or paying it incorrectly can cause issues for you with an employment tribunal and potentially with HMRC.

If you need help when the National Minimum Wage increases in England and Wales, our experienced employment lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents for a low monthly fee. So call us today on 0808 196 8584 or visit our membership page.

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