The National Living Wage was introduced back in April 2016 with a target of 60% of median earnings by 2020. Since then, the annual earnings of a full-time minimum wage worker will have increased by over £2,750. As in previous years, these increases will start to be effective beginning in April 2019. So we are here to give you a ‘heads up’ on the increases that are coming and the eligibility criteria.
The increase in wages will commence on 1st April and is expected to benefit approximately 2.4 million workers. The increases are as follows:
Workers aged 25+
Increasing from £7.83 to £8.21 per hour
Workers aged 21 – 24, wages will increase from £7.38 to £7.70 per hour
Workers aged 18 – 20, wages will increase from £5.90 to £6.15 per hour
Workers aged 16 – 18, wages will increase from £4.20 to £4.35 per hour
Apprentice wages will increase from £3.70 to £3.90 per hour
For apprentices to be entitled to the new apprentice rate, the individual must be under the age of 19, or 19 years or older and in the first year of their apprenticeship. If they are over the age of 19 and have already completed the first year of their apprenticeship, the individual is entitled to minimum wage for their age group.
The accommodation offset rate will rise to £7.55 per day. This is an allowable deduction from wages for accommodation, which is applicable for each day of the week.
There is also set to be an increase in Statutory Pay Rates, as happens every April. The first of these increases will take place on 6 April for Statutory Sick Pay. This pay is due to increase from £92.05 to £94.25 per week.
Statutory Maternity, Paternity, Shared Parental, and Adoption Pay is to increase as of 7th April 2019 from a weekly rate of £145.18 to £148.68, or 90% of the employee’s average weekly earnings if this figure is less than the statutory rate. Also, be mindful that for Statutory Maternity Pay and Statutory Adoption Pay the amount payable for the first 6 weeks is 90% of the employee’s average weekly earnings. For the following 33 weeks, the employee will be entitled receive the statutory pay rate in force at the time (soon to be £148.68) or 90% of the employee’s average weekly earnings, if this figure is less than the statutory rate.
For businesses, these increases will affect wage bills and also increase their overall workplace pension contributions for staff. Pension contributions are set to rise to 3% in April 2019 as well and could affect the bottom line and cash flow of businesses if they are unprepared.