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Government promises an increase to the ‘National Living Wage’

October 24, 2023
Employment Law

Annual increases in National Minimum Wage rates are normally heavily influenced by the recommendations of the Low Pay Commission (LPC). However, this year the Chancellor of the Exchequer, Jeremy Hunt, has jumped the gun and made a guarantee of his own! 

What's happening next April?

At the Conservative Party Conference, during his keynote speech, Mr Hunt confirmed that regardless of the recommendations of the LPC, the ‘National Living Wage’ (the National Minimum Wage rate payable to most workers aged 23 and over) will increase to at least £11 per hour.

Mr Hunt claimed that this move will benefit over 2 million of the UK’s lowest paid workers; it represents an increase of roughly 5.5%. However, given that inflation is still running at 6.7% (and the effective rate of inflation experienced by low income families is probably higher), many workers may question whether this increase is really enough.

National minimum wage compliance

Although the LPC has not yet published its recommendations for the 2024 National Minimum Wage rates, it has recently reported on National Minimum Wage compliance and enforcement. The picture is a little worrying. The report suggests that as many as one in five NMW workers are being underpaid, yet many of them feel unable to complain or to seek better paid work elsewhere, because of the insecurity of the labour market. This all creates a rather confusing picture about the position of our lowest paid workers.

Any questions?

If you have any questions about National Minimum Wage compliance within your organisation, please get in touch.

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