Minimum Wage rises to £10.42 in April 2023
The minimum wage for workers aged 23 and over will rise from £9.50 to £10.42 an hour in April. Are you ready to implement the changes?
The increase in the minimum wage of 9.7% was announced by Chancellor Jeremy Hunt during his Autumn Statement 2022, to help workers cope with rising prices. Younger workers under 23 years of age will also see an increase in their minimum pay.
The increase to the minimum wage will boost the pay of about two million people in the UK and comes as many households, particularly those with lower incomes, are struggling to meet the higher cost of living. Businesses need to plan now to implement the changes when the new minimum wage comes into force. For example, make sure the increase in minimum pay of your lower paid workers doesn’t devalue the pay of your other employers and consider where you need to increase wages elsewhere.
As well as increasing wages for other employees business could consider other benefits it can offer employees to help make their benefits package more attractive. In our salary guide we discuss some of the other benefits that employees are looking for from their employer such as hybrid working, or extra days holidays. For example working from home can help offset other household costs such as after school childcare, or commuting expenses. There are extra benefits available that employees value, so you may need to consider what benefits you should offer to reward employees.
Download a copy of our latest guide, or contact us 01782 338787 for more guidance.
How much is the minimum wage?
The minimum wage – known officially as the National Living Wage – varies depending on the age of the employee.
From 1 April 2023, the increases will be:
|Up to 31 March 2023||From 1 April 2023|
|Age 23 and over||£9.50||£10.42|
|Aged 21 to 22||£9.18||£10.18|
|Aged 18 to 20||£6.83||£7.49|
*The apprentice rate applies to people aged under 19, or people over 19 in the first year of their apprenticeship.
The minimum wage is the same across all parts of the UK.
National Minimum Wage with salaries
To give you a better idea of how this will impact your salaries we’ve compiled the following table for you:
Aged 23 and over.
|Up to 31 March 2023 (£9.50 per hour)|
|Hours worked per week||Min Wage per Hour||Per Week||Salary|
|From 1 April 2023 (£10.42 per hour)|
|Hours worked per week||NEW Min Wage per Hour||NEW Per Week||Salary||Increase|
Download our simple guide below to keep for reference.
Do employers have to pay the minimum wage?
The UK national minimum wage sets out the lowest amount a worker can be paid per hour by law.
The retail, care and hospitality sectors account for a large number of minimum-wage jobs, although they are found in many other parts of the economy too.
Employers not paying the minimum wage can be fined by the UK tax authority, HMRC so business should comply to avoid fines and damage to their reputation.
If you think you should be getting the minimum wage and aren’t, speak to your employer, or you can complain via the HMRC website. You can also get advice from the ACAS website or by calling its helpline on 0300 123 1100.
Who sets the minimum wage?
The rates are decided each year by government and based on the recommendations of an independent advisory group, the Low Pay Commission.
The Low Pay Commission’s recommendations are made based on the state of the economy. It considers how many people are in work, what’s happening to everyone’s earnings and how much they are having to pay for essentials such as food and housing.
Who isn’t entitled to the minimum wage?
There are some groups of people who don’t qualify for the minimum wage, these include the self-employed, company directors, volunteers, members of the armed forces, prisoners and people living and working in a religious community.
People with disabilities or those in long-term unemployment who take part in a government work programme are paid fixed amounts at different stages of the programme, which are less than the minimum wage.
Work done by prisoners is paid at a minimum of £4 a week, while students on work placements of less than a year as a required part of their studies are not entitled to be paid anything.
When was the minimum wage introduced?
The law to introduce the minimum wage was passed in 1998 by the Labour government and it came into force the following year. Before the minimum wage was introduced, the lowest-paid people consistently saw the slowest growth in their wages. The introduction of the minimum wage helped reverse this trend.
Before the minimum wage was introduced, there was concern that it would cost jobs, because employers would compensate for their higher wage bill by hiring fewer people. However there was no evidence of an overall loss of jobs linked to the minimum wage.
What is the ‘Real Living Wage’ and how much is it?
As well as the minimum wage there is also the Real Living Wage. More than 300,000 workers benefit from this voluntary “Real Living Wage”, which is set by the Living Wage Foundation charity. It’s above the level of the legal minimum wage, reflecting what the charity thinks people need to earn to cover everyday needs.
It is now £11.95 per hour in London, and £10.90 per hour elsewhere in the UK. Some Employers voluntarily sign up to the Real Living Wage, with the number of Living Wage-accredited employers doubling to 11,000 employers in the last two years.
Salary Guidance for businesses in Staffordshire and Cheshire
If you are reviewing the impact of the minimum wage on your salaries and would like more guidance on whether your salaries are competitive download a copy of our latest salary guide.
For more support for all your recruitment activity contact us on 01782 338787.