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Document updated/added on 29.01.2021

Topic: Pay and pensions

letter providing NMW statement
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Letter providing NMW statement

Letter providing NMW statement

If you employ any staff who are paid at national minimum or national living wage levels, it’s good employment relations practice to advise them in writing of the government’s annual increases.

Annual increases

You must pay your workers at least the national minimum wage (NMW) or national living wage (NLW). The hourly rate for the NMW/NLW depends on their age and on whether they’re an apprentice; there are five different rates. The NMW/NLW rates are reviewed annually and then they change every 1 April following recommendations made by the Low Pay Commission (LPC). The government doesn’t have to accept the LPC’s recommendations, but it invariably does so. So far, the rates have always risen.

Implementing the change

When the NMW/NLW rates change, you must action those changes immediately. However, even though the rates change on 1 April each year, a worker is only entitled to the rate that applies on the first day of the particular pay reference period, even if the rate changes during that pay reference period. For example, if your pay reference period is the calendar month, then you will need to increase the NMW/NLW on 1 April each year. However, if your pay reference is weekly and 1 April falls in the middle of a week, you will not need to increase the NMW/NLW until the start of the next pay reference period, which may be several working days later.

Letter contents

Our Letter Providing NMW Statement is effectively an announcement you can send to all relevant staff advising them of the increases to the five NMW/NLW rates each year. It also confirms how the apprentice rate applies and what school leaving age is. You can send it either before the rates change (they’re usually announced a few months in advance) or once the rates have changed. It’s an alternative to using our Letter Advising of NMW Rate Increase - Due to Legislation as that letter envisages each worker will be sent a tailored letter according to the particular rate that applies to them, whereas this letter is a generic one that sets out all the rate changes.

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