This week, the Low Pay Commission (LPC) published a number of reports and recommendations:
- a short report marking the imminent increases in the NMW and NLW, and projecting the NLW rate for April 2025 (we project that a rate of £11.89 (with a range of £11.61-£12.18) would be sufficient in 2025 to stay at two-thirds of median hourly pay).
- LPC’s advice to the Government on the future of the National Minimum Wage (NMW). This report weighs up the progress of the minimum wage to date and sets out Commissioners’ views on the future of the rate.
From April 2024, the NMW is set to reach the target of two-thirds of median hourly earnings, for workers aged 21 and over.
Since 2016, the LPC has set the NLW with reference to a target. The Government has now published LPC’s remit for 2024:
The labour market is strong, with payroll employment at a record high and the unemployment rate is low by historical standards. However, we recognise that workers and employers have faced a challenging period of high inflation (which is now falling) and a weakened global economy.
In this context, the government asks the Low Pay Commission to monitor and evaluate the National Living Wage. We ask the Low Pay Commission to recommend the National Living Wage rate which should apply from April 2025 in order to maintain the bite at two-thirds of median earnings, and protect progress made to end low hourly pay for this group, without recommending any further revisions to the age threshold.
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In making its recommendations for the minimum wage rates, the Low Pay Commission is asked to take into account the state of the economy, employment and unemployment levels and the wider labour market, business impacts, and relevant policy changes.
This is in alignment with BRC’s recommendations in our latest submission to the LPC, asking for the wider economic context to be taking into consideration, moving away from politically set targets.
The LPC will launch its consultation next week. We are currently surveying members to inform our response to this consultation. Please follow this link to respond to our HR Benchmark.
The LPC is also undertaking visits across the UK to gather evidence towards its future recommendations.