NMW/NLW Update
Introduction
With a new financial year just around the corner, it’s important to be aware of the forthcoming increases to the National Living Wage and National Minimum Wage. It’s imperative for recruitment agencies and our clients to fully prepare and ensure compliance
What’s Changing for PAYE Workers?
- National Living Wage (21+) – increasing from £10.42 to £11.44*
- National Minimum Wage (18 – 20) – increasing from £7.49 to £8.60
- National Minimum Wage (16 – 17) – increasing from £5.28 to £6.40
*From April 2024 the National Living Wage is extended to 21 and 22-year-olds
How will this affect Clients Hiring PAYE Umbrella Workers?
Below is an illustration of minimum pay rates for any worker that are supplied via a recruitment agency, where workers are working under PAYE umbrella engagement:
Minimum pay rates 1st April 2024
| Age | Hourly Rate |
|---|---|
| 21 + over | £14.75 |
| 18 -20 | £11.15 |
| 16-17 | £10.00 |
Contact with your Agency?
If we are currently supplying you workers that we are engaged / paying via PAYE or PAYE Umbrella we will be in touch shortly to discuss the new rates to keep us both compliant with NMW/NLW legislation.
Does this effect clients that are hiring self employed workers?
In short YES. As you will know 99% of agency workers in the construction industry are paid CIS/Self employed via an “umbrella company” All of our umbrella partners are members of the FCSA (Freelancer & Contractors Services Association). https://fcsa.org.uk/
The FCSA code for self-employment clarifies that any assignment rate below £14/hour is automatically assumed to be high risk and, therefore, is subject to additional checks to verify the employment status. The code will not increase the assignment rate from April 2024 despite the planned NMW increases. However advice from our umbrella partners, encourages agencies to consider increasing the rate to £15/hour to reflect inflation changes. If you have any questions, please speak to us.