National minimum wage rises – can employers bear the brunt?
The Autumn Statement delivered by Chancellor, Jeremy Hunt on 17 November confirmed the new national minimum wage rates and in particular that the national living wage was going up from £9.50 to £10.42. All the minimum wages are going up at least 9.7% and the age 21 to 22 is up a whopping 10.9% from 1 April 2023.
While clearly this is designed to try and offset the rocketing cost of living, all of which is very laudable, the other side of the coin is the effect it is going to have on smaller and cash strapped employers and the possible risk of further redundancies because of their inability to afford these increases. Already there is an increase in rates of redundancies and if employers are unable to absorb these increased minimum wages, there is a risk that more will follow in 2023.
The updated rates are: –
- Age 23 or over (NLW rate): £10.42 (up 9.7% from £9.50).
- Age 21 to 22: £10.18 (up 10.9% from £9.18).
- Age 18 to 20: £7.49 (up 9.7% from £6.83).
- Age 16 to 17: £5.28 (up 9.7% from £4.81).
- Apprentice rate: £5.28 (up 9.7% from £4.81).
- Accommodation offset amount: £9.10 (up 4.6% from £8.70).
Linking into this is the recent article by my colleagues, Remy Ormesher and David Israel regarding redundancies in tech firms and whether they are doing it right. Redundancies for whatever reason are stressful at the best of times – but the best way to make them as painless as possible is to make sure they are done right, both for employers and employees. A little amount of legal advice at the outset can save a lot of pain, cost and time further down the line.