Autumn 2021 Budget – Wage Increases 1 April 2022

As expected earlier in the week it was confirmed by the Chancellor in yesterday's budget that new hourly rates of pay will apply from 1 April 2022. There are some significant increases which employers must find in order to ensure compliance with minimum wage. National Living Wage for workers and employees over 23 will rise from £8.91 to £9.50 per hour which result in a full-time worker who meets the criteria receiving in excess of £1,000 per year extra before tax and a minimum annual salary for those aged over 23 on a 40-hour week will be just under £20,000. There are also increases in the National Minimum Wage for all aged under 23.

Employers must ensure that they have systems in place to flag when an employee is moving through the age brackets, so that they can ensure that the employee's pay meets the minimum requirements. Employees who believe they are not paid in line with their entitlements can report their employer to HMRC who will then investigate. The penalties that follow any non-compliance can be a fine of up to £20,000 per employee and can also include public naming and shaming and even criminal prosecutions against company directors.

Employees are also protected if they raise issues in respect of minimum wage and can commence tribunal proceedings against their employer for any failure to pay the minimum wage or for detriments suffered as a result of raising the issue.

Full list of entitlements from 1 April 2022:

• National Living Wage for over-23s: From £8.91 to £9.50 an hour
• National Minimum Wage for those aged 21-22: From £8.36 to £9.18
• National Minimum Wage for 18 to 20-year-olds: From £6.56 to £6.83
• National Minimum Wage for under-18s: From £4.62 to £4.81
• The Apprentice Rate: From £4.30 to £4.81

This article is for general guidance only. It provides useful information in a concise form. Action should not be taken without obtaining specific legal advice.