The Chancellor, Jeremy Hunt has delivered his Autumn Statement on 17th November 2022 and employers will need to plan ahead for wage cost increases. Following the recommendations of the independent Low Pay Commission (LPC), the government will, from 1st April 2023, increase National Living Wage (NLW) for workers aged 23 and over by 9.7% to £10.42 an hour.
Also, the government has accepted the LPC’s recommendations for the other NMW rates to apply from April 2023, including:
Increasing the rate for 21-22 year olds by 10.9% to £10.18 an hour;
Increasing the rate for 18-20 year olds by 9.7% to £7.49 an hour;
Increasing the rate for 16-17 year olds by 9.7% to £5.28 an hour;
Increasing the apprentice rate by 9.7% to £5.28 an hour; and
Increasing the accommodation offset rate by 4.6% to £9.10 an hour
The apprentice rate applies to workers aged under 19, or those workers who are over 19 but in the first year of their apprenticeship.
Any employer not paying the minimum wage can be fined by HMRC and be named and shamed.
If not done so already, businesses will need to assess their workforce situation for 2023 onwards, like where they can make cost efficiencies to reduce overheads and that could entail a recruitment freeze and reduction in headcounts giving rise to redundancies. However, statutory redundancy pay would not apply to employees made redundant who have under 2 years of continuous service.
If redundancies are being considered, it is prudent for businesses to take HR advice as matters of procedure and outcomes can be quite complex.
The article is for general information purposes only and should not be relied upon as authoritative and is correct as of 17th November 2022.
However, should you require any further assistance on the matter, please do not hesitate to call our advice-line team on 01455 852028.
