How do you prepare for minimum wage increases coming 1st April 2024?

As a business owner or manager, you need to be ready for the minimum wage rates increase from 1 April 2024.

The details of the increase are:

  • Adult minimum wage will go up from $22.70 to $23.15 per hour.
  • Starting-out and training minimum wage will go up from $18.16 to $18.52 per hour.
  • All rates are before tax and any lawful deductions, for example, PAYE tax, student loan repayment, child support.

If you have not yet talked to your accountant, payroll provider or your finance/HR teams,  now is the time. It is also a great opportunity to check your employment records and up to date, and produce amendments for those that need it.

Are your processes and systems are current?  Do you understand what is required?

How do we prepare for the increases

1. Advise your team

If you have employees on the minimum wage, let them know about the increase they will be getting. You should send them a letter or email around the variation of employment conditions advising them of the new wage.

2. Check your payroll systems and processes

Make sure those involved in your payroll are ready to implement the change.

If your system is manual or computer-based, you should check and confirm the settings will be adjusted for the new rates.

If any of your employees are on starting-out or training wages, now is a good time to check when they will be eligible to move onto the adult rate.

If any employment agreements (contracts) are not current or you did not give one to your employees, now is an ideal time to discuss with them in good faith.  It is the law to have a contract with your employees.  Update the contract with any terms and conditions that were agreed to by both parties before the contracts were last reviewed. Make sure they include all the mandatory clauses a contract should have by law. Another useful tool is the employment agreement builder if your employees do not have one.

Employment agreement builder

Things an employment agreement must contain

3. Employee pay relativity

You may also wish to consider potential impacts on your business due to internal wage relativity and external benchmarking. For example, how employees are paid compared to each other, and how your pay rates compare to others in your industry or sector. Employees on higher wages may want to negotiate a pay increase to keep the relative difference.

4. Update your business budget

Ensuring your budgets are updated to include any increase in costs is essential to ensure you are on track with your finances.  This will help you plan for and manage the effect of higher wage and holiday pay liabilities.

5. Upskill on employer obligations

Now is also an ideal time to ensure you know the details around the minimum wage, as well as all the other legislation involved in payroll

#youdontknowwhatyoudontknow  right?

If you want to understand that you are paying your employees correctly, then join me for the next intake of the Payroll Essentials Training Course that starts 9th May 2024.
📍 How do you know you have it right?
📍 How do you check your are not underpaying, or even overpaying your employees?
📍 Are you or your payroll team receiving training?
📍 How do you check your payroll team has it right?
For more information and registration, go here.
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