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National Living Wage increases by 6.2%

The National Living Wage (NLW) increases by 6.2 per cent from today (1 April) to £8.72, giving a pay rise to thousands of low-paid workers at the frontline of the UK’s response to Covid-19.

The new rate results in an increase of £930 over the year for a full-time worker on the National Living Wage, and follows recommendations made to the Government by the Low Pay Commission (LPC) in the autumn. It means the rate reaches the target of 60 per cent of median earnings, originally set by the Government in 2015.

The full set of rates are as follows:

Previous rate Current rate from 1 April 2020 Increase
National Living Wage £8.21 £8.72 6.2%
21-24 Year Old Rate £7.70 £8.20 6.5%
18-20 Year Old Rate £6.15 £6.45 4.9%
16-17 Year Old Rate £4.35 £4.55 4.6%
Apprentice Rate £3.90 £4.15 6.4%
Accommodation Offset £7.55 £8.20 6.4%

 

Alongside the increase in the National Living Wage and National Minimum Wage, additional labour market reforms are also coming into place on 6 April, enhancing workers’ rights across the board.

These include:

  • Parental Bereavement Leave and Pay, implementing a statutory right to a minimum of 2 weeks’ leave for all employed parents if they lose a child under the age of 18, or suffer a stillbirth from 24 weeks of pregnancy. Eligible parents will be able to claim statutory pay whilst absent from work. This is the most generous offer on parental bereavement leave and pay in the world.
  • Workers to receive a day-one statement of rights, which will set out leave and pay entitlements to around 1.5 million people for the first time.
  • The scrapping of the Swedish Derogation – an end to the legal loophole which enables some firms to pay agency workers less than permanent staff.
  • New agency workers to benefit from a key facts page before signing up with an agency, which will provide clarity on their rights, particularly around their pay.
  • Just two per cent of employees need to make a request for the employer to inform and consult them on issues relating to the business before an employer must commence negotiating such an arrangement, this has been reduced from 10 per cent.
  • Increasing the reference period for calculating holiday pay for workers with variable hours from 12 to 52 weeks, meaning employers must count back across the last 52 weeks that employee has worked and received pay, to calculate how much holiday pay they should receive. This ensures that workers holiday pay is more reflective of the pay they would have received if they’d been at work.

In response to the pressure on businesses as a result of the coronavirus outbreak, the government has launched a comprehensive support package for businesses and workers during this time which can be accessed on the Business Support website.

About Sarah OBeirne

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