The national minimum and living wage (NMW/NLW), as well as other statutory payments, will be rising next month. This comes at a time of significant increases to the cost of living and will be welcomed by low-income earners across the UK. However, many businesses are still recovering from the ravages of the pandemic, and now have the new threat of disrupted supply chains, sanctions, and other issues as a result of the Russian invasion and its impact on Ukraine and surrounding nations.
National Minimum Wage and National Living Wage (NMW/NLW)
| Age | Rate from 1 April 2021 | Rate from 1 April 2022 | Percentage increase |
| Workers aged 23 and over (NLW) | £8.91 | £9.50 | 6.6% |
| 21-22 | £8.36 | £9.18 | 9.8% |
| 18-20 | £6.56 | £6.83 | 4.1% |
| 16-17 | £4.62 | £4.81 | 11.9% |
| Apprentices under 19, or over 19 and in the first year of the apprenticeship | £4.30 | £4.81 | 4.1% |
NLW payments for workers aged 23 and over will increase by 6.6%. This is the biggest increase to the NLW since its introduction and keeps the government on track to reach its commitment to make this equal to two-thirds of median earnings by 2024.
This is a continuance of Boris Johnson’s “levelling up agenda” and the goal of a high wage, high skill, and high productivity economy.
Since 2021, there are five different NMW/NLW bands. There are only short gaps between these bands, so employers must be careful to keep up to date with important anniversaries, such as birthdays and apprentices moving into their second year. 16% of those ‘name and shamed’ in December 2021 for failing to pay NMW/NLW gave the reason as failing to increase pay in line with entitlement.
The increase is due in the next “pay reference period” after the increase has taken affect, which may mean that pay does not increase for the individual until some way into April. The “pay reference period” is the period within which the pay is calculated. For example, if Wilhelm gets paid monthly on the 15th, the old rate will apply until the pay reference period beginning on 16 April. Therefore, Wilhelm will get the old rate between April 1 and 15. It may be necessary to inform employees of this, depending on when the pay reference period falls, to avoid any confusion or accusations of failure to pay properly.
Family friendly statutory payments
Other increases are also coming in, in April 2022, including family friendly payments, which from 3 April 2022 will increase to £156.66 from £151.97 (including shared parental, maternity, adoption, paternity, and parental bereavement pay).
Employers will have to increase payments for employees away from work on paid family leave, from the date of the increase (3 April 2022).
Statutory sick pay (SSP) and the lower earnings limit (LEL)
The LEL will increase for the first time in two years, rising from £120 to £123 from 6 April 2022. SSP will increase then from £96.35 to £99.35.
Daily Rates for Statutory Sick Pay: 2022-23
| Unrounded daily rates | Number of qualifying days in week | 1 day to pay | 2 days to pay | 3 days to pay | 4 days to pay | 5 days to pay | 6 days to pay | 7 days to pay |
| 14.1928 | 7 | 14.19 | 28.38 | 42.57 | 56.76 | 70.95 | 85.14 | 99.35 |
| 16.5583 | 6 | 16.56 | 33.12 | 49.68 | 66.24 | 82.80 | 99.35 | |
| 19.87 | 5 | 19.87 | 39.74 | 59.61 | 79.48 | 99.35 | ||
| 24.8375 | 4 | 24.84 | 49.68 | 74.52 | 99.35 | |||
| 33.117 | 3 | 33.12 | 66.24 | 99.35 | ||||
| 49.675 | 2 | 49.68 | 99.35 | |||||
| 99.35 | 1 | 99.35 |
National Insurance (NI)
Another change is the increase to NI by 1.25% from April 2022. Payroll will therefore need to be adjusted. HMRC have asked employers to include the following on all payslips between 6 April 2022 and 5 April 2023: “1.25% uplift in NICs funds NHS, health and social care”, which, whilst optional, will remind employees why this has happened. Letting staff know that about this in advance, that it has been mandated by the government, and how it will impact them, will allow them to prepare. Some employees may be upset about this but there is no obligation to cover the difference in net pay.
Statutory Guarantee pay (SGP)
SGP has also not seen an increase in two years. SGP is the payment made to laid off employees, and is a daily rate paid, to a maximum of a normal working week, every 13 weeks. For example, if Susie works 3 days a week, she will get 3 x £31 SGP. This rate increases from 6 April 2022.
Time to prepare
April is nearly upon us, and employers need to act now to make sure they are aware of any workers that are getting a pay rise in April so it can be implemented smoothly when the time comes. It must also be noted that these increases happen on different days in early April, so care will need to be taken to ensure correct payments are made when the time comes.