Statutory wage increases for April 2021

From 1 April 2021 thousands of low paid workers will receive a pay rise of almost 9%, as the eligibility for the national living wage is widened to include 23 and 24-year-olds.

From 1st April 2021:-

National Living Wage increases to £8.91 per hour.

The national minimum wage increases:

  • from £8.20 to £8.36 for 21 to 22 year olds
  • from £6.45 to £6.56 for 18 to 20 year olds
  • from £4.55 to £4.62 for 16 and 17 year olds
  • from £4.15 to £4.30 for apprentices

Other statutory changes

From 4th April 2021 Statutory Maternity, Paternity, Adoption, Parental Bereavement and Shared Parental Pay is set to increase from £151.20 to £151.97 per week.

Additionally, from 6th April 2021 the rate of statutory sick pay (SSP) is also set to increase from £95.85 to £96.35 per week.

Action Points for employers:

Keep a record

There is a requirement under the NMW Regulations to maintain sufficient records to evidence that the NMW has been paid for at least the last 3 years. It is a criminal offence not to do so. As an added incentive, there is a presumption that an employee has not been paid the NMW unless an employer can prove to the contrary.

Be mindful of ‘salary sacrifice’

For example, this may be where employees opt for increased pension contribution or childcare vouchers by way of deduction from their gross salary. If so, it is important that this must not take the employee’s average hourly pay below the NMW. The Government has confirmed (following concerns that this denies the lowest paid the benefit of the tax breaks brought by a salary sacrifice scheme), that, whilst an employer caught paying below the NMW on this basis alone would not be subject to a penalty, they could still be ‘named and shamed’.

Review your pay structure

Look at what the increases in minimum wage does in terms of narrowing the gap to those made more than minimum wage and do you need to make any changes further up the “scale”

If you have any questions about Statutory wage increases April 2021 get in touch!

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