The National Minimum Wage (Amendment) Regulations 2025 will come into force on 01 April 2025. ICB wants to clarify two things about these Regulations and, indeed, similar legislation that comes into force at the same time every year. This is for the purpose of ensuring you are in the position of being able to talk to clients about this in the event of queries:
The Effective Date
The legislation comes into force on Tuesday 01 April 2025. These Regulations update the National Minimum Wage Regulations 2015 and increase the hourly rates for workers as follows:
|
Rate
|
From April 2024
|
From April 2025
|
Change
|
Change
|
|
|
£
|
£
|
%
|
£
|
|
Adults (21+) aka the National Living Wage
|
11.44
|
12.21
|
6.7
|
0.77
|
|
18 – 20 rate (previously Youth Development)
|
8.60
|
10.00
|
16.3
|
1.40
|
|
Under 18 (above compulsory school leaving age)
|
6.40
|
7.55
|
18.00
|
1.15
|
|
Apprentice *
|
6.40
|
7.55
|
18.00
|
1.15
|
*For apprentices aged 16 to 18 and those aged 19 or over who are in the first year of their apprenticeship. All other apprentices are entitled to the rate applicable for their age.
The Accommodation Offset daily rate increased by 6.7% from £9.99 to £10.66.
However, just because the legislation comes into force on 01 April 2025, from a statutory perspective, this does not mean that the new rates are effective on that day. This is regardless of what press releases or news coverage might say.
The Pay Reference Period
The 2025 Regulations amend the 2015 Regulations which are the main source of reference for employers. Although the legislation has not been updated in respect of new rates that have applied since 2015, we must refer to these Regulations for the effective date. Regulation 4 is clear that:
The single hourly rate of the national minimum wage at which a worker is entitled to be remunerated as respects work, in a pay reference period, is the rate which applies to the worker on the first day of that period.
So, this means that, from a legislative perspective, if the period of time for which a worker is paid starts on Tuesday 01 April 2025, the new rates must be paid from that day. However, if this is not the first day in the pay reference period but is partway through, the new rates start from the following pay reference period. For example:
- On a monthly payroll, it is common for workers to be paid from the first to the last day of the month. If this is the case, working time must be paid at the new rates from 01 April 2025;
- If it is a weekly payroll, the pay reference period could start Monday 31 March and end Sunday 06 April (with payment being made the following week). If this is the case, legislatively, the rate of payment for this entire pay reference period is the rate that applied on 31 March 2025. The first full pay reference period that starts on and after 01 April 2025 does not begin until 07 April 2025
For Bookkeepers
As ICB has mentioned before, this article is designed to point you to the statutory position. Many employers will believe that the rate has to be paid from 01 April 2025 and may request the pay reference period is pro-rated. This is not necessary in order to comply with the law, so this piece may provide you with a justification to employers who want to pay the new rates from 01 April 2025.
The Acas guidance ‘Example of pay not going up straight away’ provides an example of a worker with a monthly pay reference period that starts on the 16th of one month and ends on the 15th of the following month. This shows how the old rate can be paid up until 15 April but the new rate must be paid from 16 April (the start of the first full pay reference period on or after 01 April).
Although, importantly, if employers do want to pay some of the pay reference period at one rate and some at another, there is nothing to say that this pro-rata work cannot be done.
