Increases to UK national minimum wage and NLW

The government will implement the Low Pay Commission’s (LPC’s) recommendations in full and the national living wage (NLW) will increase by 9.7% in April 2023 to 10.42. This is consistent with the government’s target of two-thirds of median earnings by 2024.

The new rates that will come into force on 1 April 2023 are as follows:

• national living wage (age 23 and above) – 10.42;
• age 21-22 – 10.18;
• age 18-20 – 7.49; and
• age 16-17 – 5.28.

The accommodation offset will also rise to 9.10 per day.

Employers may want to review contracts and arrangements for lower paid staff to identify areas of risk and areas where their existing practices might not take sufficient account of the NLW framework.

Increases to other employment limits and statutory payments

The limits in relation to unfair dismissal and redundancy pay are increasing as follows:

• England and Wales unfair dismissal and redundancy pay – from 6 April 2023, the limit on a statutory week’s pay will increase to 643 (up from 571). This means that the maximum statutory redundancy payment and unfair dismissal basic award will be 19,290. The cap on the compensatory award for unfair dismissal will increase from 93,878 to 105,707; and
• Northern Ireland unfair dismissal and redundancy pay – from 6 April 2023, the limit on a statutory week’s pay will be 669 (up from 594). This means that the maximum statutory redundancy payment and unfair dismissal basic award will rise to 20,070....

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