New National Minimum Wage (NMW) and National Living Wage (NLW)
rates come into effect on 1 April 2023.
The new rate for the NLW will be £10.42, representing a 92p increase over the current rate. The NLW is the minimum hourly rate that must be paid to those aged 23 or over. The hourly rate of the NMW (for 21-22-year-olds) will increase to £10.18 (a rise of £1). The rates for 18-20-year-olds will increase to £7.49 (a rise of 66p), and the rate for workers above the school leaving age but under 18 will increase to £5.28 (a rise of 47p). The NMW rate for apprentices will increase by 47p to £5.28. The accommodation offset will rise to £9.10 per hour (an increase of 40p).
Employers must update their systems by 1 April 2023 to reflect the new rates, as there are significant penalties for employers who are found to have paid workers less than the above rates.
If you have underpaid an employee, you must pay any arrears immediately. There are penalties for non-payment of up to 200% of the amount owed unless the arrears are paid within 14 days. The maximum fine for non-payment can be up to
£20,000 per employee, and employers who fail to pay face a possible 15-year ban from being a company director and being publicly named and shamed.