National Minimum Wage Increase 2022 Updates & Mistakes to Avoid!

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On the 27th of October the government released the new National Minimum Wage rates (NMW) effective from 1st April 2022. The table below shows the updated rates and more information can be found here.

AgeRate from April 2021Rate from April 2022
National Living Wage £8.91 £9.50
21-22 Year Old Rate £8.36 £9.18
18-20 Year Old Rate £6.56 £6.83
16-17 Year Old Rate £4.62 £4.81
Apprentice Rate £4.30 £4.81
Accommodation Offset £8.36 £8.70

Whilst the on the topic of NMW increases, HMRC have released a list of the ‘Top 10 Mistakes Made by Employers when paying NMW’.

  1. Failure to apply the annual minimum wage rate increase as they go up each year on 1 April.
  2. Missed birthdays as employees turn 18, 21 or 25 years old and move from one NMW rate to another.
  3. Paying the apprentice rate to somebody who isn’t actually an apprentice. Recognised apprentices must have an apprenticeship contract and undergo an element of structured training.
  4. Continuing to pay the apprentice rate for too long. The apprentice rate only applies to apprentices who are under the age of 19, or if aged 19 or over within the first year of their apprenticeship.
  5. Making wage deductions for items or expenses that are connected with the job. This could include, for example, safety clothing, uniforms, tools etc.
  6. Making wage deductions that are deemed to be for the employer’s “own use or benefit”. For example a Christmas club saving scheme. It doesn’t matter that the worker can choose to buy into the scheme and the employer doesn’t have to make a profit from it.
  7. Charging a worker more than the stated offset rate for living accommodation, currently £49 a week.
  8. Not paying for all the time worked such as time spent travelling, training or downtime at the employer’s disposal.
  9. Not paying for additional time worked such as time spent clearing security checks once a worker’s shift has finished.
  10. Including elements of pay that don’t count towards minimum wage such as tips and the premium element of pay associated with shift premium.

When preparing for the increase in the national minimum wage, it is important that companies ensure not only that increases are budgeted for, but also the knock-on effect that a higher minimum wage rate may have on other employees, whose rates may also need to be reviewed to maintain a salary difference between levels of staff.

In regards to other relevant changes, as of 6th April 2022 employee national insurance contributions increase by 1.25% with employers increasing by 1.8%. This increase is to help fund the NHS and the impact that the pandemic has had.

If you need assistance with NMW or any other HR related issue, please get in touch.

Harwood HR – HR Consultants providing HR Consultancy and HR Outsourced Services.  We provide clear, cost effective HR advice. For a free consultation, please contact us on:

0117 439 0119 or info@harwood-hr.co.uk

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