Minimum wage, SSP and family-friendly rates to increase in April 2024

As the National Minimum Wage marks 25 years since it was first introduced, this year it is no ordinary year when it comes to pay rate changes

National Minimum Wage and National Living Wage

Currently, an employee must be over 23 years-old to receive the National Living Wage (NLW). However, this threshold will be reduced so that for the first time, 21-year-olds will be eligible to receive the NLW.  The rates are also increasing as follows:

·         National Living Wage for those 21 years old and over will increase to £11.44 per hour

·         National Minimum Wage for those aged 18 to 20 years old will be £8.60 per hour

·         Rate for those over school age but not yet 18 will be £6.40 per hour

·         The apprentice rate which is payable to apprentices aged 19 and under, or 19 or over and in the first year of their apprenticeship will be £6.40 per hour

 The new, higher rates will need to be paid from the start of the first pay reference period after 1 April 2024.

 My employee turns 21 in May 2024, what does this mean for their minimum wage pay?

 If an employee is off sick when their maternity leave is due to start, what do I pay them?

 Which method of holiday pay should I use for irregular hours workers or part year workers from April 2024?

Family-friendly rates

 The rate for statutory maternity, paternity, adoption, shared parental, and parental bereavement pay per week are increasing in April 2024 from £172.48 to £184.03.

Statutory Sick Pay

 The rate of Statutory Sick Pay (SSP) will also increase from £109.40 to £116.75 per week in April 2024.

The lower earnings threshold, at or above which employees must earn in order to receive various statutory payments, will, however, remain unchanged at £123 per week.

Rolled-up holiday pay

Whist we are on the topic of pay, it is also worth noting that rolled-up holiday pay will once again be an option for part-year and irregular hours workers for leave years that start on or after 1 April 2024.

This is when a worker is paid holiday pay at the same time as they receive their wages, so the payments are “rolled together”. In practice, this means adding on an extra 12.07% of total pay for work done in the pay period and paying it in each pay packet.

An employer, however, does not have to use rolled-up holiday pay. Instead, they can pay for the holiday when the worker takes the leave.

Annual leave entitlement for irregular hours and part-year workers is also changing for leave years on or after 1 April 2024. Holiday will accrue, on the last day of the pay period at the rate of 12.07% of hours worked in that pay period. Workers will, therefore, accrue holiday based on how much they work.

If an employer wants to implement rolled-up holiday pay and/or pro-rata annual leave for irregular hours or part-year workers, they can only do so for leave years on or after 1 April 2024. If the organisation has a leave year of January to December, therefore, they won’t be able to make these changes until January 2025. Also, it is important to remember that if implementing either or both means that it is different to what an employer is currently doing, then it will be a change to terms and conditions which will need to be agreed with staff first.