• Reminder: National minimum wage increases April 2022
Article:

Reminder: National minimum wage increases April 2022

31 March 2022

Employers should keep in mind that, in tandem with increased NIC rates related to the health and social care levy, wage costs may also be impacted from April 2022 by significant increases in national living wage (NLW) and national minimum wage (NMW) rates as can be seen here.

This is, perhaps, even more likely to be an issue for those who employ apprentices and 21-22 year old workers, where the percentage increases are steepest, however for any employer, the message is to check that you remain compliant in respect of all employees and workers and in doing so, you do not rely solely on paying staff at rates in excess of the headline minimums!

In our experience, there are the many ways in which the complex NLW/NMW provisions work to catch the unwary employer and which, notwithstanding a seemingly compliant approach, can lead to employers inadvertently falling foul of the rules. That, in turn, can give rise to significant financial costs in making good the shortfall and paying an associated penalty (up to 200%) but also the reputational cost of being “named and shamed”.

Issues that repeatedly arise include underestimating what constitutes working time for any pay period, payments which don’t qualify towards NLW/NMW being incorrectly incorporated within calculations, and deductions which serve to reduce pay being overlooked.

Employers whose compliance processes have to date not extended beyond checking the headline rates are recommended to undertake a more detailed review to protect their organisation. Please contact our specialist colleagues to discuss your needs.

Read our useful guide on some of the key NMW issues to look out for in 2022.