LPC consultation: Recommendations on the NLW and NMW rates for April 2022

25 March 2021

The Low Pay Commission (LPC) has published its latest consultation, which seeks evidence on the impacts of the National Living Wage (NLW) and National Minimum Wage (NMW), to help shape its recommendations to Government on the rates that should apply from April 2022.

The consultation opened on 24 March 2021 and will close at 11:45 pm on 18 June 2021.

The recommendations for the NLW from April 2022 are directed by the Government’s targets of the NLW amounting to two-thirds of median earnings by 2024. The intention for the other NMW rates is to increase them as much as possible without subsequently unintentionally negatively impacting employment. This is the LPC’s standard approach to NMW rates year-on-year.

The consultation document asks for responses relating to:

  • The affordability and impacts of a proposed increase to the NLW, meaning it will sit at £9.42 per hour from April 2022. This is the LPC’s current intended goal, but the range could vary from 7 pence either above or below this figure
  • Feedback and opinions on the NLW pathway to 2024. It is anticipated that, by April 2024, the NLW rate will reach £10.33 with a potential range of 23 pence above or below this figure. Additionally, it is intended that the age threshold for the NLW will decrease from 23 and above to 21 and over, within the same timeframes, at the latest
  • The LPC also wants to discuss the impacts of the most recent uplifts to the NLW and other rates, and any effects on employment and hours, pay and benefits, productivity, prices and profits

Obviously, a key area for consideration for this year’s consultation will relate to the economic turbulence posed by coronavirus, and the Government support measures put in place to support both individuals and businesses through the pandemic.

CIPP comment

The CIPP’s Policy team will be producing a survey on the topic of NLW and NMW rates for application from April 2022, to collate the views of payroll professionals prior to submitting our formal consultation response to the LPC. In addition to this, any CIPP members holding full membership and above will have the opportunity to participate in a virtual roundtable thinktank meeting, attended by Commissioners of the LPC, who will be listening to your views and opinions on the future of the NLW and NMW. More details will be provided shortly.

 


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