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Minimum wage, family friendly leave rates, and SSP set to increase in 2024

Minimum wage, family friendly leave rates, and SSP set to increase in 2024
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Peninsula Team, Peninsula Team

(Last updated )

2024 is set to be a busy year for employers and their HR teams, with various new employment laws set to come into force. With the Government’s announcement of the new National Minimum and Living Wage (NMW/NLW) rates, applicable from 1 April 2024, along with proposed increases to family friendly leave rate and SSP, it’s going to be an expensive one too. 

On 21 November 2023, the Government announced the biggest ever increase to the NLW, worth over £1800 a year for a full-time worker, or just under 10%. This fulfils the Government’s manifesto pledge to lift the NLW to two-thirds of median earnings by 2024. Since it was first introduced in 2016, the NLW will have doubled in cash terms from around £10,500 to nearly £21,000 a year for a full-time worker. With the latest rate increase from 1 April 2024, for the first time, 21-year-olds on the NLW will always earn two-thirds of average earnings.

The other big news announced was that eligibility for the NLW will also be extended by reducing the age threshold to include 21-year-olds. Currently the NLW is the legal minimum rate per hour for those aged 23 or over. This expansion means that there will no longer be a ‘20 to 21-year-old’ banding so a 21-year-old, who is paid in line with the minimum rates, will get a 12.4% increase between March 2024 and April 2024, when their pay will go from £10.18 to £11.44 an hour, which is worth almost £2300 a year for a full-time worker. The Department for Business and Trade estimates 2.7 million workers will directly benefit from the 2024 NLW increase.

The increases from 1 April 2024 are as follows:

  • National Living Wage for those 21 years old and over will be £11.44
  • National Minimum Wage for those aged 18 to 20 years old will be £8.60
  • For 16- and 17-year-olds (over school leaving age), and apprentices under 19 or 19 and over and in the first year of the apprenticeship, the rate will be £6.40.

The increase doesn't necessarily have to be on 1 April, which is when the new rates are effective from. The new, higher rates will need to be paid from the start of the first pay reference period after 1 April. So, if the pay month runs from the 15th of each month, the increased rates don’t have to be applied until 15 April.

It is important that employers ensure that they remember employees’ birthdays and take account of any changes in age which mean that they move pay band. This is because where the single hourly rates that a worker is entitled to changes, for example, because they move between age pay bands, it applies from the first day of the next pay period.

On 28 November 2023 the Government also published its proposed rates for family-friendly leave, statutory sick pay, and the lower earnings threshold from April 2024. These rates are yet to be confirmed but it would be unusual for them to be changed.

The proposals are:

  • statutory maternity, paternity, adoption, shared parental and parental bereavement pay will rise from £172.48 to £184.03 per week
  • statutory sick pay will increase from £109.40 to £116.75 per week
  • the lower earnings threshold, at or above which employees must earn in order to receive various statutory payments, will remain unchanged at £123 per week.

It is important that employers ensure that they pay the correct rates and take account of changes at the appropriate time.  

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