With effect from April 1, 2024, the National Living Wage (NLW) will rise by more than 9%, from £10.42 to £11.44.
For individuals working 37.5 hours per week, this adjustment could mean an extra annual wage cost for employers amounting to £1,990. Factoring in additional expenses such as employer’s National Insurance and pension contributions, the overall supplementary cost for businesses could reach £2,325 per employee annually.
Whilst industries that pay their staff by the hour, including manufacturing, retail, care, and hospitality, will bear the brunt of this impact on staffing costs, it remains important for all employers to exercise caution, as salaried employees may also approach the threshold.
Additionally, employers should take care with salary sacrifice schemes. Even if the offered salary satisfies the new thresholds, it is imperative to ensure that employees do not compromise their pay to such an extent that it falls below the National Minimum Wage (NMW).
Presently, the NLW is exclusively applicable to those aged 23 and above. From April 2024, the NLW will extend to individuals aged 21 and over, while the NMW will gradually decrease for those aged 18-20, under 18, and apprentices.
The minimum hourly rate for all categories of workers with effect from April 2024 is set out below.