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DWF comments on the National Minimum Wage and the National Living Wage increases

With the National Minimum Wage (NMW) and the National Living Wage (NLW) both set to increase from 1 April 2022, Joanne Frew, UK head of employment law at DWF, comments on what it means to those on low pay and what employers need to do.

She said:

“This timely annual increase will be welcomed by many as the UK faces the challenges of a cost of living crisis. The NLW for those aged 23 or over will increase from £8.91 to £9.50 an hour, a significant 6.6% increase. The apprentice rate is increasing by 11.9% from £4.30 to £4.81.

“Recognising that young workers have been severely impacted by the pandemic, the hike in minimum wage represents a clear step in the right direction. However, many would argue that the increases do not go far enough, to counter soaring inflation and the increased cost of living.

“As the lowest paid workers are struggling to manage, employers will be under increased scrutiny with regard to NMW compliance. Due to the highly complex nature of NMW calculations, many high profile employers have previously inadvertently fallen foul of the legislation, resulting in substantial penalties and reputational damage. Where workers are paid the NMW, or near to the NMW, employers should consider undertaking a NMW audit in order to minimise risk.”