National Minimum / Living Wage – NOT Always 01 April 2024

It seems like an annual event I write an article like this.? However, it all stems for a time I had a conversation with a client about the date it becomes legal requirement to pay the National Minimum Wage appropriate to a workers’ type and age.?

In that regard, there are three changes to look for from 01 April 2024 before I write about the effective date:

The National Minimum Wage (Amendment) Regulations 2024 made one change.? This legislation came into force on 01 April 2024 (which is not the same as saying that the changes are effective from that date):

The National Minimum Wage Regulations 2015 (regulations 57(1) & 57(3)) stated that a worker that was living as part of the family (but are not family) were not workers (and if they are not workers, there is no obligation to pay at the National Minimum Wage rate appropriate to their age).? The exemption applied to domestic workers living with a family and treated as part of the family, commonly applying to nannies, au pairs, companions, chauffeurs and chefs.?

The 2024 Amendment Regulations remove this live-in domestic worker exemption which now only applies to a worker who:?

• Is a member of the employer’s family, and
• Residing in the family home of the employer, and
• Sharing in the tasks and activities of the family

The National Minimum Wage (Amendment No. 2) Regulations 2024 made two changes.? Again, this legislation came into force on 01 April 2024 (NOT saying the changes are effective from that date):

Fulfilling a commitment, Autumn Statement 2023 (point 3.14 amongst other references) extended National Living Wage eligibility to workers aged 21 and over (from 23 and over).

Ahead of Autumn Statement 2023, on 21 November 2023, the UK Government published a press release accepting the recommendations of the Low Pay Commission about National Minimum / Living Wage rates to apply from April 2024.? The below were confirmed:

Both above pieces of legislation come into force on 01 April 2024.? However, there is conflicting guidance as to when they are effective:?

• Gov.UK says ‘the rates change on 1 April every year’.? This does not tell the full story and is confusing
• The November 2023 press release is more accurate as it says eligibility and rates will change ‘from April’

From a statutory perspective, ?it is correct to say that the eligibility and rates are effective from the first full Pay Reference Period (PRP) that starts on or after Monday 01 April 2024.? The National Minimum Wage Regulations 2015 define this as the period for which someone is paid:?????????????

A “pay reference period” is a month, or in the case of a worker who is paid wages by reference to a period shorter than a month, that period.

Further, The National Minimum Wage (Amendment) Regulations 2016 (4B) clarifies that the rate:?

‘at which the worker is entitled to be remunerated as respects work in the pay reference period is the rate that applies to the worker on the first day of that period’.

Everything from a statutory point of view depends on the age and eligibility status of the worker on the first full PRP starting on and after 01 April 2024, so:?

Monthly

For a monthly worker, it is quite likely that their PRP will start on Monday 01 April 2024.? It does not matter what date they are actually paid, it’s all to do with age and eligibility status on Monday 01 April 2024.??

If a worker turns 21 after 01 April 2024, say the 15th, the statutory entitlement to be paid at the National Living Wage does not start until 01 May 2024, as that is the start of their first full PRP.?

Weekly

Again, it is quite likely that a weekly-paid worker will have a PRP that starts on Monday 01 April running through to Sunday 07 April 2024.? They must be paid according to age and eligibility status on Monday 01 April 2024.?

This differs if, say, the worker is paid on a Sunday to Saturday PRP (31 March to 06 April 2024).? The first day of the PRP was 31 March and from a statutory point of view, they are entitled to be paid according to the rates and eligibility criteria that applied on that date.

If an employer or client wants to pay from 01 April or from the date that the worker crosses from one age threshold to another, there is absolutely nothing wrong with this.? The worker that reaches 21 mid-PRP may result in a pro-rata pay calculation, however, if that is what the employer / client wants to do then that is fine.?

The point of this 2024 article is that there is no statutory obligation: