National Minimum Wage: What rate should it be in April 2022?

Norfolk businesses are being asked to contribute to the Low Pay Commission’s (LPC) consultation on the National Minimum Wage (NMW) rates for April 2022.  The LPC is the independent body that advises the Government on the level of the minimum wage.  They have been asked to recommend in October 2021 the National Minimum Wage (NMW) and National Living Wage (NLW) rates to apply from April 2022.

This year, the Government has once more asked the LPC to increase the NLW towards a target of two-thirds of median earnings, by 2024, taking economic conditions into account.

In addition, the Government intends to move the age threshold for the NLW to 21 by 2024 (the planned reduction from 25 to 23 will come into effect this April).  Although their recommendations in the autumn 2021 will be subject to Commissioners’ assessment of economic conditions, their current best estimate for the on-course NLW rate in April 2022 is £9.42, with a likely range of 7 pence above or below this figure. 

Their current best estimate of an NLW set at two-thirds of median earnings for those aged 21 and over in 2024 would be £10.33, with a likely range of 23 pence above or below this figure.  These are based on the latest wage growth forecasts, but actual wage growth may turn out higher or lower, and the LPC will update these ranges in the summer based on changing forecasts.

We are keen to hear from businesses off all sizes and across all the sectors, especially in view of the impacts of the pandemic on employers and workers in low-paying sectors, and the prospects for recovery.  

We particularly want to hear your thoughts and opinions on the following areas:

  • The affordability and effects of an increase in April 2022 to a NLW rate within the on-course range of £9.42 plus or minus 7 pence.
  • Views on the LPC’s remit to 2024, involving the target of two-thirds of median earnings and lowering the NLW age threshold to 21.
  • The impact of increases in the NLW, since its introduction, including the April 2021 uprating on workers, employers, the labour market and the economy.
  • The impact on 23 and 24 year olds of this April’s lowering of the NLW age threshold to 23; and the impact on 21 and 22 year olds of the eventual lowering to 21.
  • For the other NMW rates, affecting workers aged under 23 and apprentices, we are seeking evidence to make recommendations on the basis of raising the pay of as many low-paid workers as possible without damaging their employment prospects.

For full details on the Low Pay Commission’s consultation click here.

We are also looking for anonymous case studies i.e. “Engineering company in Wymondham said the impact of a NMW increase would be …” to help support our submission to the Low Pay Commission.

Please send your thoughts and opinions on the impact of any increase in the National Minimum Wage to: nova.fairbank@norfolkchambers.co.uk by no later than close of play on Thursday 27 May 2021.

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