#Minimum wage increase full

Unlike the NLW (where the possibility of some consequences for employment have been accepted by the Government), the LPC’s remit requires us to set the rates for younger workers and apprentices as high as possible without causing damage to jobs and hours. International evidence also suggests that younger workers are more exposed to employment risks arising from the pay floor than older workers.

Rates for workers aged under 23, and apprentices, are lower than the NLW to reflect lower average earnings and higher unemployment rates.

Following LPC recommendations in 2019, the age threshold for the NLW was lowered from 25 to 23 in April 2021 and is due to be lowered to 21 by 2024.

This emergency brake will ensure that the lowest-paid workers continue to see pay rises without significant risks to their employment prospects.” The government remains committed to the 2024 target, but if the economic evidence warrants it, the Low Pay Commission should advise the government to review the target or its timeframe. In this year’s remit, the Government asked the LPC “to closely monitor developments in the labour market, including the impact of increases to the minimum wage rates, and advise on emerging risks.

The LPC’s recommendations on the NLW are informed by a Government-set target for that rate to reach two-thirds of median earnings by 2024.

Different minimum wage rates apply to 21-22 year olds, 18-20 year olds, 16-17 year olds and apprentices aged under 19 or in the first year of an apprenticeship.

The National Living Wage (NLW) is the statutory minimum wage for workers aged 23 and over.

The Government’s remit to the LPC, which determines the Commission’s work through the year, was published in March and is available here.

The Government has today announced its acceptance of those recommendations.

The LPC submitted its recommendations on 24 October 2022.

These include the LPC’s review of the Accommodation Offset evidence around the NLW’s impacts on different regions of the UK and the effects of the minimum wage on workers with protected characteristics.

#Minimum wage increase full

It will set out the full evidence base for this year’s recommendations, and Commissioners’ advice to the Government in several areas. The LPC’s full report will be published and laid in Parliament in the coming weeks. NMW rates for 18-20 and 16-17 year olds and apprentices will increase in line with the NLW increase of 9.7% in recognition of the tight labour market and strong demand for labour in youth-friendly sectors. The 21-22 Year Old Rate will increase to £10.18, narrowing the gap with the NLW and leaving this age group on course to receive the full NLW by 2024. These recommendations have the full support of the business, trade union and academic representatives who make up the Commission.Īlongside the NLW, the Commission recommended significant increases in the National Minimum Wage (NMW) rates for younger workers. The tightness of the labour market and historically high vacancy rates give us confidence that the economy will be able to absorb these increases.īusinesses also have to navigate these economically uncertain times and by ensuring we remain on the path to achieve our 2024 target, employers will have greater certainty over the forward path.

For a full-time worker, today’s increase means nearly £150 more per month.

The rates announced today include the largest increase to the NLW since its introduction in 2016 and will provide a much-needed pay increase to millions of low-paid workers across the UK, all of whom will be feeling the effects of a sharply rising cost of living. They are recommended against a backdrop of a tight labour market where unemployment is at record lows and vacancies remain high as businesses compete to recruit and retain staff.īryan Sanderson, Low Pay Commission Chair, said: The increases announced today will support the wages and living standards of low-paid workers at a time when many are feeling increased pressure from a rising cost of living. Read the LPC’s recommendations to Government and summary of evidence here.