Minimum Wage and National Living Wage rates rise tomorrow – will you get £930 pay rise?
While the coronavirus pandemic may be a topic which the population is understandably spending much of their time thinking about, with April and the tax year end rolling around, a number of changes are set to take place in the coming days. Despite the COVID-19 crisis, the government last week confirmed that its plans to increase the National Minimum Wage and National Living Wage (NLW) are set to go ahead.
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The rises were first announced back in December 31, last year.
It will see National Living Wage increase by 6.2 percent, with the new NLW rate starting on the first day of April.
According to estimates from the independent Low Pay Commission, nearly three million workers are set to benefit from the rise to the NLW and minimum wage rates for younger workers.
The new rate starts tomorrow, on April 1, 2020.
The increase to the NLW results in an increase of £930 over the year for a full-time worker on this rate, with this comparing the gross annual earnings of a person working 35 hours per week on the new NLW rate from April versus the 2018/19 NLW rate (£8.21).
The 2020 rate increases were recommended by the Low Pay Commission, which is an independent body that advises the government about the National Living Wage and the National Minimum Wage.
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Last week, the right-leaning thinktank The Institute for Fiscal Studies (IFS) urged the government to delay the changes due to the unprecedented coronavirus crisis.
However, despite concern about the changes not taking effect from April 1, the government last week confirmed this would not be the case.
A Government spokesman told the PA news agency: “It is right that workers are fairly rewarded and should not lose out during this time of disruption.
“Therefore, we will continue with our proposed increases to the national living wage and the national minimum wage in April.
“However, we recognise that this will mean extra costs for some businesses.
“The Chancellor has announced the Coronavirus Job Retention Scheme to help firms continue to keep people in employment.”
Mary Walker, partner and employment law specialist at law firm Gordons, commented: “This is a significant increase – more than four times the rate of inflation for those aged 25 and over – and further increases are due to follow, as set out in the Chancellor’s Budget in March.
“In fact, it’s the biggest percentage since the National Living Wage was first introduced in 2016.
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“As the IFS has already pointed out, this is another squeeze on businesses already facing pressure from external factors, including coronavirus and the subsequent restrictions to working practices.
“Whilst it would be welcomed by workers, including those who have been furloughed, organisations will have to bear the brunt of additional costs, particularly in the short-term at a time when many are struggling with cashflow challenges.”
Unison general secretary Dave Prentis said: “Wednesday’s pay rise will make a real difference to over a million low-paid workers across the country.
“Many care staff are on the minimum wage. They’re looking after the elderly and vulnerable in the most challenging of circumstances and deserve every penny.
“All employers must ensure their staff get the legal increase next week.”
National Living Wage rates
The National Living Wage (for over 25 year olds) will increase by 6.2 percent from £8.21 to £8.72.
National Minimum Wage rates
The National Minimum Wage will rise across all age groups, including:
- A 6.5 percent increase from £7.70 to £8.20 for 21-24 year olds
- A 4.9 percent increase from £6.15 to £6.45 for 18-20 year olds
- A 4.6 percent increase from £4.35 to £4.55 for Under 18s
- A 6.4 percent increase from £3.90 to £4.15 for Apprentices
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