Employee birthdays and national minimum wage pay increases

Happy Birthday! Have a pay increase! The National Minimum Wage is paid according to an employee’s age, with minimum wage rates that employers must pay reviewed each year.

The UK National Minimum wage, statutory rates of pay, and compensation limits will be increased in April 2023.

If you have employees between the age of 18 – 23 years, a birthday may mean a pay rise.

Managing pay increases after employee birthdays

• Make sure that you write to the employee informing them of the rate change – we have a letter on our HR toolkit for this purpose. The letter details the change, explains why this has happened and when to ensure there are no misunderstandings.
• Keep records and have a tracking system to ensure you are prepared for when this needs to be applied
• Have regular checks – it is the employer’s responsibility to pay the correct rate of National Minimum Wage so make sure you are confident you are on top of changes, especially if you have a young workforce.
• Pay the new rate from the start of the next pay reference period on or after their birthday
• If you accidentally miss the start date, ensure that you back-date the pay as soon as possible.

If you do not comply with the National Minimum Wage rules, a complaint can be made to the HMRC, and you can be fined, so have the systems and checks in place you need.

Minimum wage for 16 and 17-year-olds

16 and 17-year-olds (i.e. those over minimum school leaving age but less than 18 years of age).must be paid at least the National Minimum Wage for their age of £5.28 per hour. In England, they must do one of the following alongside any employment:

• full-time education or training, such as school or college
• work-based learning, such as an apprenticeship
• working or volunteering (for 20 hours or more a week) while in part-time education or training

At 16 and 17, children are given additional protection in the workplace in relation to their working hours, which vary between term time and school holidays, increased rest breaks, and there are restrictions on the types of duties that they can undertake. For example, there are significant restrictions in relation to alcohol, toxic chemicals and radiation.

Minimum wage for 18-year-olds

18-year-olds must be paid at least the National Minimum Wage for their age of £7.49 per hour. This rate applies to those aged 18-20.

Once someone reaches the age of 18, adult employment rights and rules apply, with the restrictions on working hours, rest periods and work duties significantly reduced.

Minimum wage for an 18-year-old apprentice

The National Minimum Wage for apprentices was established to encourage employers to employ apprentices and the lower apprenticeship wage rate reflects the reality that apprentices are still in training and require support with their development.

An 18-year-old apprentice is entitled to earn £5.28 per hour. This rate increases to the full National Minimum Wage or National Living Wage rate for their age when they have both reached 19 years old and successfully completed the first year of their apprenticeship

Minimum wage for 21-year-olds

The rate of pay for 21-year-olds is £10.18 per hour. Note that the rate is inclusive of ages 21-22.

Standard national living wage rate

The National Living Wage for adults aged 23 and over is £10.42 per hour.

Minimum wage for under 16 year-olds

There is no minimum wage for under 16’s. Parents/guardians or other responsible adults must consider whether pay is reasonable.

The nature of the work undertaken needs to be appropriate for children and not affect the child’s health or school performance. A work permit must also be obtained from the local authority. Examples of accepted work are delivery of newspapers, shop work, cafes and restaurants and hair salons.

There are many restrictions in relation to the number of working hours when work is undertaken and the number of breaks required.

National minimum wage from April 2024

The government will consult on a planned increase to the national living wage from April 2024. Please sign up to our newsletter (using the boxes below) for further information as it is released.

If you would like assistance setting up appropriate records and checking systems, or reviewing your pay records, we would be happy to make a difference to your business. We provide HR support and advice to companies of all sizes and structures.