Steve Talbot, Global Employer Services Partner at BDO Leeds, said the new rates are even more likely to be an issue for those who employ apprentices and 21-22-year-old workers, where the percentage increases are steepest.
“For any employer, the message is to check that you remain compliant in respect of all employees and workers.
“In our experience, there are the many ways in which the complex NLW/NMW provisions work to catch the unwary employer and which, notwithstanding a seemingly compliant approach, can lead to employers inadvertently falling foul of the rules.
“That, in turn, can give rise to significant financial costs in making good the shortfall and paying an associated penalty (up to 200%), but also the reputational cost of being named and shamed.”
Talbot also said issues that repeatedly arise include underestimating what constitutes working time for any pay period, payments that don’t qualify towards NLW/NMW being incorrectly incorporated within calculations and deductions that serve to reduce pay being overlooked.
The new rates
|Wage band||Current rate||Rate from 1 April 2022|
|Age 23 and over (National Living Wage)||£8.91||£9.50|
|Age 21 to 22||£8.36||£9.18|
|Age 18 to 20||£6.56||£6.83|
The National Living Wage (NLW) is for people aged 23 or over, while the National Minimum Wage (NMW) applies to those aged under 23 or in an apprenticeship.
All workers must be paid the National Minimum Wage or National Living Wage. This is whether they are full-time, part-time, doing training essential for the job or working in a small or ‘start-up’ business.
It also applies to:
• Agency workers
• Agricultural workers
• Casual labourers (e.g. someone hired for one day of work)
• Casual workers
• Employees on probation
• Foreign workers
• Offshore workers
• Workers paid by commission
• Workers paid by the number of items made (piece work)
• Zero-hours workers
The only types of work that are not covered are those who are self-employed (by choice), volunteers (by choice), company directors, in the armed forces, doing work experience, shadowing someone or under school leaving age.
More information can be found on the government website.