Largest increase to the minimum wage rate 2024

The Government has announced its acceptance of the Low Pay Commission’s recommendations on minimum wage rates to apply from April 2024.

This will be the largest ever increase in the minimum wage in cash terms and the first time it has increased by more than £1. The size of this increase is driven by the strength of pay growth across the economy, which is forecast to continue into next year.

National Minimum Wage (NMW) and National Living Wage (NLW)

Age	Rate from 1 April 2023	Rate from 1 April 2024
Workers aged 23 and over (NLW)	£10.42	–
Workers aged 21 and over (NLW)	–	£11.44
21‒22-year-olds	£10.18	–
18‒20-year-olds	£7.49	£8.60
16‒17-year-olds	£5.28	£6.40
Apprentices under 19, or over 19 and in the first year of the apprenticeship	£5.28	£6.40

Effective from April 1, 2024, it’s important to note that the National Living Wage (NLW) will now encompass individuals aged 21, extending the upper age band of the National Minimum Wage (NMW). Employees falling under this category should be transitioned to the NLW accordingly to ensure compliance and avoid underpayment.

Domestic Workers

Regarding domestic workers, the existing arrangement will cease from April 1, 2024. Previously, workers not considered family members but treated as such in terms of living arrangements, meals, shared household tasks, and leisure activities, and not charged for food or lodging, were exempt from NMW/NLW requirements when performing tasks typically done by family members.

However, this exemption will no longer apply after April 1, 2024. Employers must make alternative arrangements for these workers, including ensuring their pay meets at least the NMW/NLW threshold. It’s important to adhere to lawful deductions, ensuring they do not reduce pay below the NMW/NLW after accounting for accommodation offsets.

In addition to the minimum wage adjustments, pay related to statutory family-related leave is also increasing from £172.48 to £184.03, covering statutory maternity, adoption, paternity, shared parental, and parental bereavement pay.

Sick pay

Furthermore, statutory sick pay will increase from £109.40 to £116.75, effective April 6, 2024.

Redundancy payments

The limit on a week’s pay for the purposes of redundancy calculations along with other tribunal compensation limits, is set out below.

Payments	From 6 April 2023	From 6 April 2024
Limit on a week’s pay for calculating redundancy and unfair dismissal basic award	£643	£700
Maximum basic award for unfair dismissal and statutory redundancy payment (30 weeks’ pay subject to the limit on a week’s pay)	£19,290	£21,000
Maximum compensatory award for unfair dismissal —subject to a maximum cap of a year’s pay	£105,707	£115,115

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