The National Living Wage is set to increase from £10.42 per hour to £11.44 per hour effective from April 2024.
What does this mean to Employers?
Some employers will be fine with the increase in which case they need to ensure that employees are informed of the increase and when their salary will increase. From April 2024 they will need to pay the new amount which would be £11.44 per hour. So, for a full-time employee working 35 hours a week it would be £20,820.80 compared to the current £18,964.40.
It is the largest ever increase and will mean that some employers may not be able to afford to keep staff on, in which case, they may want to start thinking about their options i.e. consider reducing hours or restructuring.
The eligibility for the NLW will also be extended by reducing the age threshold to 21-year-olds for the first time. They will get a 12.4% increase, from £10.18 this year to £11.44 in 2024.
The National Minimum Wage rates for younger workers will also increase, as 18–20-year-olds will get £8.60 per hour.
Arguing that the increases will “end low pay in this country”, The chancellor said that the increase will “end low pay in this country” and “the National Living Wage has helped halve the number of people on low pay since 2010, making sure work always pays.”
Whether the increase as high as this will help the economy or not is to be seen, as SME’s also grapple with hiring suitably qualified staff who have the skills to carry out the work, managing staff remotely, dealing with the change in working ethos and competing with bigger organisations in respect of salary packages.