Increase to the National Living Wage

In November last year, the UK government announced what the annual National Living Wage increase in April 2023 would be its largest increase since its introduction in 2016. The large increase comes as a much-needed pay rise to millions of workers across the UK who are feeling effects of a sharp rise in the cost of living.

The National Minimum Wage, statutory sick pay, maternity, adoption, paternity and shared parental pay rates also increased in April 2023, along with annual increases in tribunal compensation limits.

National Minimum Wage (NMW) and National Living Wage (NLW)

Whilst we refer to the NMW and NLW as two separate things, the only difference between them is the legal age brackets associated with each. A NMW is offered at a minimum to those between school leaving age and 22 years, and those aged 23 or over shouldn’t be paid less than the NLW.

These minimum hourly pay rates generally increase each year, based on recommendations made by an independent body called the Low Pay Commission. The new rates for 2023 will apply from 1 April 2023, and are as follows:

Legal age brackets	Rate from April 2023	Increase from 2022 (£)	Increase from 2022 (per cent)
Ages 23 and over (NLW)	£10.42	£0.92	9.7%
Ages 21-22	£10.18	£1.00	10.9%
Ages 18-20	£7.49	£0.66	9.7%
Ages 16-17	£5.28	£0.47	9.7%
Apprentices*	£5.28	£0.47	9.7%

*There are different rates of pay for apprentices depending on your age and what year of your apprenticeship you’re in.

When you receive your first pay cheque after 1 April, use the information above together with your payslip to check that you’re earning the minimum hourly rate of pay for your age. If you need some help understanding or finding key information on your payslip, refer to our blog – ‘Your Payslip Explained’.

If your hourly rate is not displayed on your payslip but you know how much you have earned for the week or the month before tax, you can use our salary calculator to see what you are earning per hour before tax.

Whether you work full or part time has no bearing on the rate of pay you are entitled to receive. Part time employees have the legal right to earn the same rates as their full-time counterparts.

Statutory Sick Pay increase

Statutory Sick Pay (SSP) will rise from £99.35 a week to £109.40 a week from 2 April 2023. SSP is paid when you’re too ill to work, and is paid by your employer for up to 28 weeks. You cannot receive less than the statutory amount, however you could get more if your employer has a sick pay scheme as part of your employment contract.

To be eligible for SSP, you must:

be classed as an employee and have done some work for your employer
earn an average of at least £123 per week
have been ill for at least 4 days in a row (including non-working days)

Visit the UK government website for more information on SSP.

Statutory maternity, paternity, adoption and shared parental pay rises

On 2 April 2023, statutory maternity, paternity, adoption and shared parental pay rates will rise from £156.66 to £172.48 a week.

If you’re wanting to claim any parental pay, check with your manager or Blue Arrow consultant to confirm if you qualify.

Increase in compensation limits

The Employment Rights (Increase of Limits) Order 2023 came into effect on 6 April 2023, increasing the limits on various maximum employment tribunal awards. If you are made redundant after 6 April 2023 and you qualify for statutory redundancy pay, your statutory redundancy pay will be calculated using a ‘week’s pay’ of up to £643 (previously £571). You will normally be entitled to statutory redundancy pay if you’re classified as an employee and you’ve been working at your current employer for two years or more.

If you ever feel that you’ve been unfairly dismissed from your job and you make a claim against your employer at an employment tribunal, the maximum amount of compensation that you could receive is £105,707 (previously £93,878). However, this will be based on individual circumstances and may be lower than this maximum amount.

Next steps

Whether you’re a temporary worker or permanent employee, there is nothing you need to do in order to prepare for these changes in legislation. The NMW, NLW and statutory pay increases will take effect, and your employer or agency will ensure that they’re paying you in line with the new laws.

If you feel that you’re not receiving at least the minimum statutory pay rates where applicable, ask your manager, HR department or Blue Arrow consultant to explain how your pay has been calculated.

As a trusted recruitment agency, we ensure that all candidates are paid the NMW and NLW at a minimum. Reach out to your Blue Arrow recruitment consultant or local branch if you have any questions about your pay rate.

Increase to the National Living Wage

National Minimum Wage (NMW) and National Living Wage (NLW)

Statutory Sick Pay increase

Statutory maternity, paternity, adoption and shared parental pay rises

Increase in compensation limits

Next steps

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