The national living wage is the government-set minimum rate that employers must pay to staff for each hour worked.
Starting from April 2023, millions of workers will be getting a boost in their wage packet after Chancellor Jeremy Hunt announced a rise in the National Living Wage. The rise was announced yesterday at a rate of 9.7% from April which is a considerable increase to past years. This means that the rate in real terms will increase in April as follows;
For 23 years olds and over – £10.42 per hour.
For 21-22 years old – £10.18 per hour.
18-20-year-olds – £7.49.
16-17 year olds – £5.28.
Apprentice rate will also be £5.28 per hour.
The move is expected to benefit more than two million of the UK’s lowest-paid workers. Whilst it has largely been welcomed there has been some criticism that self-employed individuals have been forgotten.
However, the pending increase has caused some concern for SMEs. Many small businesses will struggle with the increase alongside the increase to energy and other costs and this in turn could well lead to an increase in redundancies.
Employers will need to use all of their skills at this time to encourage good financial health within their businesses. It is always advisable to discuss and plan areas which can be improved with employees and to get them involved, both in the ideas and implementation of any cost-cutting exercise. Undoubtedly one of the ways small businesses will look to cut costs is through redundancies. However employers “will need to ensure they carry out the process fairly and properly to avoid any future legal complication. Redundancies may not be the only way forward either and advise should be sought early on in considering other options, such as implementing lay-offs and short-time working if necessary.
At Aston Bond, we help businesses ensure they get it right – be that the rate they pay, the contracts they have in place or the procedures required to make changes the a business.
If you would like discuss your options, please contact Ilinca Mardarescu (Head of Employment) on firstname.lastname@example.org