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Last updated: 3 Mar 2021
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Spring Budget 2021: Change to the national minimum wage

Among the changes announced at the Spring Budget there were announcements on national minimum wage and incentives for hiring new apprentices. 
What are the changes to the NMW?

From 1 April 2021, the national minimum wage rates (NMW) will increase. From this date, workers will be entitled to be paid no less than:  

  • £8.91 per hour (the national living wage) – for workers aged 23 and over 
  • £8.36 per hour - for workers aged 21 to 22 
  • £6.56 per hour – for workers aged 18 to 20 
  • £4.62 per hour - for workers aged under 18 who are no longer of compulsory school age and for apprentices under 19 
  • £4.30 per hour – for workers over 19 and in the first year of the apprenticeship 

From April, employers must, where necessary, increase a worker's pay to reflect the increase in the rate of the minimum wage. Failure to do so would be considered a breach of the national minimum wage legislation, the penalty of which is 200% of the total underpayment for all workers specified in the HMRC notice of underpayment, up to a maximum of £20,000 for each worker. In addition, employers are likely to suffer considerable reputational damage. 

About the author

Sarah Dalton

daltons@buzzacott.co.uk

From 1 April 2021, the national minimum wage rates (NMW) will increase. From this date, workers will be entitled to be paid no less than:  

  • £8.91 per hour (the national living wage) – for workers aged 23 and over 
  • £8.36 per hour - for workers aged 21 to 22 
  • £6.56 per hour – for workers aged 18 to 20 
  • £4.62 per hour - for workers aged under 18 who are no longer of compulsory school age and for apprentices under 19 
  • £4.30 per hour – for workers over 19 and in the first year of the apprenticeship 

From April, employers must, where necessary, increase a worker's pay to reflect the increase in the rate of the minimum wage. Failure to do so would be considered a breach of the national minimum wage legislation, the penalty of which is 200% of the total underpayment for all workers specified in the HMRC notice of underpayment, up to a maximum of £20,000 for each worker. In addition, employers are likely to suffer considerable reputational damage. 

Action to take before 1 April 2021

Therefore, by 1 April, employers must:  

Review the implications on their business of the national minimum wage increase 

Identify those whose pay needs to be increased, ensure their rate of pay is increased and write to each individual notifying them of this change.  

The Chancellor also announced that his incentive payments for hiring new apprentices are to be doubled to £3,000. Furthermore, £126 million will also be invested to triple the number of new traineeships.  

All the new packages of support surrounding protecting and creating jobs should be considered carefully in light of your organisation’s specific circumstances. While it’s worthwhile investigating all opportunities, the Buzzacott HR Consultancy team can support your business by providing tailored, practical solutions that are compliant with UK legislation.  

Have an enquiry about what this Budget update means for you? 

If your organisation has concerns about the effects of any of the above please get in touch with a member of our team today to see how we can support you. 

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