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As April approaches, employers need to be aware of the National Minimum Wage (“NMW”) changes set to apply from 1 April 2025.

On 29 October 2024, the Government announced its acceptance of the Low Pay Commission’s recommendations for pay in full. The annual increases to the NMW which will apply from 1 April 2025, are as follows:

• National Living Wage (21 yr olds and over): £12.21
• 18-20 yr olds: £10.00
• Under 18 and apprentices: £7.55

The 16.3% increase in the 18-20 yr old rate narrows the gap between that and the National Living Wage (NLW), in anticipation of the NLW being extended to 18 year olds in the future. In addition the Under 18 and apprentice rate will see a huge increase of 18%.

Whilst the increase in wages is great news for employees, there is no doubt that employers may struggle once these changes come into force, alongside the 1.2% increase to employers’ national insurance contributions. It is essential for employers to carefully examine their position and seek specialist advice if they feel they will be unable to comply with the NMW increases and remain a viable business.

It is also important for employers to understand what payments count towards the NMW. For example, basic pay, bonuses and commission count towards NMW. Whereas, tips, service charges and premium payments do not count towards the NMW.

Please refer to the QCS’s National Minimum Wage Policy and Procedure for further details of which payments can count towards NMW.

What should you do now?

As always at this time of year, employers should undertake a pay review to ensure their current rates are compliant with NMW requirements and that their workers are awarded a pay increase on 1 April 2025, to ensure future compliance. In addition, employers need to take into account dates of birth, so that each worker is paid appropriately according to their age band.

If you have any questions regarding the increase in NMW, or help ensuring your business remains viable, please do not hesitate to contact a member of the AfterAthena team (part of the Napthens Group) who are able to offer 30 minutes of free advice to QCS members.