Skip to content

Brought to you by

Dentons logo

UK People Reward and Mobility Hub

The latest updates in employment, benefits, pensions and immigration

open menu close menu

UK People Reward and Mobility Hub

  • Home
  • Events
    • Past events
  • Who We Are
    • Meet the team
  • How we can help

Changes to the National Minimum Wage and National Living Wage

By Emily Russell
March 30, 2022
  • Employee welfare
  • Legislation
  • Legislative Changes
  • Low Paid Workers
  • National Minimum Wage
  • Pay, benefits and bonuses
  • Proposed Legislative Changes
Share on Facebook Share on Twitter Share via email Share on LinkedIn

Parliament has been considering the Draft National Minimum Wage (Amendment) Regulations 2022, which implement the National Living Wage (NLW) and the National Minimum Wage (NMW) rates increases as of 1 April 2022. These changes are in line with the recommendations put forward by the Low Pay Commission (LPC) and accepted by the government in October 2021.

By way of reminder, the NLW is the lowest amount that can legally be paid to workers who are 23 or over. This should not be confused with the “real living wage” which is an amount independently calculated by the Living Wage Foundation (a campaign group) based on what it considers employees need to earn in order to get by. The real living wage is voluntarily paid by some UK businesses, but is not mandatory.

The changes in rates to NMW and NLW are set out in the table below and will come into force from 1 April 2022.

CategoryCurrent rate (valid until 31 March 2022)Incoming rate (from 1 April 2022)
Age 23 or over (NLW)£8.91£9.50
Age 21 to 22£8.36£9.18
Age 18 to 20£6.56£6.83
Age 16 to 17£4.62£4.81
Apprentice rate£4.30£4.81
Accommodation offset amount£8.36£8.70

It was also confirmed that the government has accepted the LPC’s recommendation to remove the NMW exemption for live-in domestic workers and such workers should be paid the NMW in the same way as other workers. Legislation to remove the exemption will be introduced in due course.

The significant increases to NLW and NMW from April 2022 will mean that NMW legislation could become relevant to even more employees than usual. Employers should remember that NMW is not just relevant to workers who are paid by the hour, but must also be considered in respect of employees who earn a salary. The higher rates could bring more salaried employees close to the NMW once the increase is implemented. Employers will also need to be mindful of other factors, which could cause an employee to fall below the NMW or NLW, such as salary sacrifice schemes and payments being delayed by more than one pay reference period.

Employers should remember that if they do not comply with NMW or NLW legislation they face HMRC investigation, prosecution and being “named and shamed” by the government.

Share on Facebook Share on Twitter Share via email Share on LinkedIn
Subscribe and stay updated
Receive our latest blog posts by email.
Stay in Touch
employee welfare, legislation, legislative changes, Low Paid Workers, National Minimum Wage, Pay benefits and bonuses, proposed legislative changes
Emily Russell

About Emily Russell

All posts

You might also like...

  • Employee welfare
  • Employment policies
  • Government Proposals
  • Health and safety
  • International
  • Pay, benefits and bonuses
  • Sickness absence
  • Wellbeing

COVID-19: global advice for businesses

By Laura Morrison
  • Brexit
  • Confidential Information
  • Employee welfare
  • Employment Documents
  • Restrictive Covenants
  • Unfair dismissal

Insight: UK Employment Law Round-up – December 2016

Welcome to the December edition of our employment law round-up. In this edition, we couldn’t fail to give you an […]

By Sarah Beeby
  • Legislative Changes
  • Pay, benefits and bonuses
  • Pensions

Autumn 2021 Budget: further consultation on DC charge cap announced and top-ups for 1.2 million “low earners” in net pay arrangements

By Eleanor Hart

About Dentons

Dentons is designed to be different. As the world’s largest law firm with 20,000 professionals in over 200 locations in more than 80 countries, we can help you grow, protect, operate and finance your business. Our polycentric and purpose-driven approach, together with our commitment to inclusion, diversity, equity and ESG, ensures we challenge the status quo to stay focused on what matters most to you. www.dentons.com

Dentons boilerplate image

Twitter

Categories

Dentons logo

© 2023 Dentons

  • Legal notices
  • Privacy policy
  • Terms of use
  • Cookies on this site