Employee Relations, HR, HR Updates

How to Rebalance Pay Levels After the Latest Minimum Wage Increase 2024

At Park City Consulting, we understand the complexities and challenges of managing people within your businesses, with the recent significant increase in the National Living and National Minimum Wages. We’ve been at the forefront of understanding the impact on organisations, particularly SMEs. Our Team of HR professionals are managing clients through these changes and helping them avoid the people issues resulting from the implementation of the new increased minimum wage rates. In this article, we have some top tips to consider and benefit from.

Understanding the Changes and How to Rebalance Pay Levels

On the 1st of April 2024, significant changes were made to the National Living Wage and National Minimum Wage:

These adjustments mean more employees are closer to the minimum wage threshold, increasing the risk of accidental breaches. But what does this mean for your business?

Now includes 21 and 22-year-olds (previously applied to those 23 and over).

  • Increased from £10.42 to £11.44 per hour.
  • For 18 to 20-year-olds, increased from £7.49 to £8.60 per hour.
  • For 16 and 17-year-olds and apprentices under 19 in their first year, the amount increased from £5.28 to £6.40 per hour.
  • Increased from £9.19 to £9.99 per hour.

Mitigating Risks

Given the complexity of National Minimum Wage (NMW) regulations, employers must ensure compliance to avoid penalties. Here are some common risk areas and steps to address them:

  • Pay Deductions: Deductions for uniforms, training costs, and other expenses must not reduce pay below the NMW. Employers should audit current practices, set clear policies, and monitor compliance regularly.
  • Unpaid Working Time: Ensure all working time, including mandatory training and additional hours, is compensated. Use technology to track time accurately and require training during working hours.
  • Correct Apprenticeship Rates: Pay apprentices the correct rates, adjusting for milestones and ensuring proper classification.
  • Correct Work Type Classification: Understand whether workers are “salaried” or “unmeasured” and ensure NMW compliance accordingly. Keep detailed records and use time off in lieu (TOIL) policies effectively.

Strategic Implications

The significant increase in NMW affects pay differentials within organisations. Employers must decide whether to adjust pay across the board to maintain these differentials or risk potential dissatisfaction among staff. Ignoring the impact on existing pay scales and differentials is the most common area of concern we have experienced within the SME sector.

National Minimum Wage Audits

Conducting regular NMW audits can help identify and remedy any compliance issues before they become problematic. By reviewing pay policies and interviewing staff, employers can ensure they meet regulatory requirements and avoid penalties.

Park City’s Pay Benchmarking Services

At Park City Consulting, we offer comprehensive pay benchmarking services to help businesses ensure their compensation structures are competitive and compliant. Our benchmarking services include:

  • Market Analysis: We analyse market data to provide insights into industry pay standards and trends.
  • Role-Specific Benchmarking: Compare your current pay rates with industry standards for specific roles, ensuring you stay competitive.
  • Customised Reports: Receive detailed reports tailored to your business needs, highlighting areas for improvement and adjustment.
  • Strategic Advice: Our experts offer strategic advice on adjusting pay scales and maintaining internal pay equity to motivate and retain staff.

How Park City Consulting Can Help You Rebalance Pay Levels

At Park City Consulting, we are dedicated to helping businesses manage these changes effectively. Our extensive experience and industry-leading expertise allow us to provide tailored support to ensure compliance and optimise your pay structures. We do the work for you, this is not a DIY based service with signposting and templates.

Our services include:

  • Comprehensive audits of your current pay practices.
  • Benchmarking pay within your sector and geographic location
  • Customised training programs to educate your ur HR team Managers or HR team on the latest regulations.
  • Strategic advice on maintaining pay differentials and employee satisfaction.

We’ve guided numerous clients through these changes successfully, and we’re here to help your business do the same. Contact us today to learn how we can help you Rebalance Pay Levels and ensure compliance with the new wage regulations. You are never alone with Park City, we will be stronger together.

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Saul HunnaballSaul Hunnaball
15:44 12 Aug 22
We have worked with Park City for our HR and Health and Safety support for many years now and have always received an excellent service.Carley is our Consultant and she is always so helpful, as are... her colleagues when she is unavailable.I would highly recommend Park City.read more
Lea CuttingLea Cutting
08:31 27 Jul 22
Park City have worked with us for many years, advising and guiding us regarding HR and Health & Safety, along with supplying valuable training.We work with many people in several areas of expertise,... Sara Godfrey, Jennie Galione, Ashley Williams, Sam Parcell, Stephanie Devans, Poppy Hayhoe.They build confidence within our company and are always available with support and advice.They provide a consistent, professional, hands-on service, second to none!Thank you from DH Industries Limited.read more
Vikki PringleVikki Pringle
11:12 20 Jul 22
The team at Park City offer us the right level of service needed to confidently run a small business. They keep us up to date with UK policy HR requirements, help us manage any staff changes or... issues and policy documents. The team are informed, friendly and remain professional in my experience.read more
Tracy MeadTracy Mead
07:12 20 Jul 22
The DS Group have been working with Park City now for a number of years and we have found their HR services to be invaluable. The service received is always to the highest professional standards and... they have assisted our business in becoming more efficient and effective in all HR matters.My consultant Sam Parcell is always on hand to help answering any questions quickly and professionally and she offers vital guidance, advice and support to us.We as a company will continue to use Park City’s services for many years to come and we cannot recommend them enough!Tracy Norton-Mead, Operations Director at the DS Group.read more
Katie HerbertKatie Herbert
13:35 07 Jul 22
We have worked with Park City for almost 10 years and have built up a great professional relationship over the years. The team are so friendly and helpful, and nothing is ever too much of an ask for... any of them. Our main HR contact is Carley, who is lovely, and she is very prompt in dealing with any queries we have regarding our 100+ staff. We would highly recommend their services for any local business.read more

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