Yesterday the Government announced that it has accepted the Low Pay Commission’s recommendations on minimum wage rates to apply from 1 April 2024. This is the largest ever increase to the minimum wage in cash terms. The National Living Wage will apply to all workers aged 21 and over for the first time (previously applying only to those aged 23 and over).
The annual increases to the minimum wage and national living wage with effect from 1 April 2024 are as follows:
- 21 and over – £11.44 (increase of £1.02)
- 18-20 – £8.60 (increase of £1.11)
- 16-17 and apprentices – £6.40 (increase of £1.12)
Ahead of the increase in April, business owners should take the time to identify any loss-making areas of the business, and asking themselves why they are investing in these areas. Sometimes, there can be a positive reason for a business to invest in a loss-making area of the business, however, it is important for business owners and managers to understand the granular data to identify these and ensure the quality of higher level decisions. The upcoming NMW increases create both a very real, short-term challenge for many business owners, and many SMEs will and perhaps should consider passing on the cost increase to their consumers, as now is likely the best time to be able to successfully do this.
Please get in touch if you require any assistance with pay reviews, benchmarking or any of the above.