In April 2021 the annual increase in national minimum wage rates will take effect, but this year there is a significant difference. Currently, at a higher rate, the National Living Wage (NLW) is applied to workers aged 25 or over, with the lower bands of the National Minimum Wage being applicable to those aged 24 and under. However from April 2021, the age threshold for the National Living Wage will be lowered to 23, resulting in a significant rate rise of 8.7% for all workers aged 23 and 24, as opposed to a raise of closer to 2% for all other workers.
The new rates applicable from April 2021 are as follows:
- Age 23 or over (NLW rate): £8.91 (up 2.2% from £8.72).
- Age 21 to 22: £8.36 (up 2% from £8.20).
- Age 18 to 20: £6.56 (up 1.7% from £6.45).
- Age 16 to 17: £4.62 (up 1.5% from £4.55).
- Apprentice rate: £4.30 (up 3.6% from £4.15).
- Accommodation offset £8.36 per week (up 2% from £8.20).
For agencies operating at lower wage levels, an increase in the national minimum wage, or the number of staff entitled to receive the same, may necessitate an increase in charges to hirers. Some contracts, including Lawspeed client terms, will allow for an automatic increase. However, in other cases negotiation may be required. A change in rate may also impact upon terms with PAYE candidates and/or Key Information documents where an actual figure is included as a minimum rate of pay, as required by the Conduct Regulations.
Contact Lawspeed for assistance with your terms with hirers, review of hirer or RPO provided agreements, and compliance queries. [email protected] or 01273 236 236.
Adrian, a highly experienced lawyer, founded Lawspeed in 1997. He is responsible for developing our extensive portfolio of products and services, including the widely used Lawspeed contract templates. Adrian is an expert on “recruitment law” and specialises in contracts, regulatory compliance, employment status and dispute handling. He is chair of the trade body the Association of Recruitment Consultancies, the only lawyer lead recruitment trade body in the UK. Adrian and his co-director Ravi devised Standards in Recruitment as a vehicle for helping drive up standards and compliance in the industry.
Adrian is our lead in discussions with the government over regulatory evolution. Apart from assisting with client support, Adrian’s primary role is research and development into methods of business delivery, our latest service Proterms being his most recent project. Adrian heads our IR35 lawyers team.