Furloughed workers miss out on National Living Wage increase Photo by Philip Veater on Unsplash

National Living Wage and National Minimum Wage rates increased on 1 April

The National Living Wage (NLW) increased on 1 April 2020 to £8.72, giving a pay rise to thousands of workers. The NLW is the statutory minimum wage for workers aged 25 and over.

However, furloughed workers on NLW will not see this increase. The 2020 rates do not apply unless those being paid the NLW are continuing to work during the pandemic.

A spokesperson for the Low Pay Commission told the Cranfield and Marston Vale Chronicle that workers are entitled to the NLW when they are required to be available for work.

If a furloughed worker is not engaged in work (or training) then they are not eligible for the new NLW rates. They will only be entitled to 80% of their wage from 28 February (the 2019 rates).

The rise in NLW followed the recommendations made to the Government by the Low Pay Commission (LPC) in the autumn. This increase means the rate reaches the target of 60 per cent of median earnings originally set by the Government in 2015.

Bryan Sanderson, LPC chair, said:

“Many of the nation’s key workers – in, for example, the care sector, agriculture, transport and retail – are low-paid, are continuing to work in very difficult conditions and will benefit from today’s increase.

“At the same time, the Government has introduced a comprehensive package of support for employers to lessen the impacts of these extraordinary circumstances.”

The other rates of the National Minimum Wage will also increase alongside the NLW.

  Previous rate Rate from 1 April 2020 Increase
National Living Wage £8.21 £8.72 6.2%
21-24 Year Old Rate £7.70  £8.20  6.5% 
18-20 Year Old Rate £6.15 £6.45  4.9% 
16-17 Year Old Rate £4.35  £4.55  4.6% 
Apprentice Rate £3.90  £4.15 6.4% 
Accommodation Offset £7.55  £8.20  6.4% 

In the 11 March Budget, the Government confirmed its ambition for the NLW to continue increasing towards a new target of two-thirds of median earnings by 2024. Also, the age threshold for the NLW will be reduced from 25 to 23 in 2021, and then further to 21 by 2024.

The UK Living Wage

The National Living Wage is different from the UK Living Wage and the London Living Wage.

The UK Living Wage and the London Living Wage are voluntary pay benchmarks that employers can sign up to if they wish. They are not legally binding requirements. The LPC has no role in the UK Living Wage or the London Living Wage.

The UK Living Wage and London Living Wage hourly rates are based on an attempt to measure need, whereas the National Living Wage is based on a target relationship between its level and average pay.

The UK Living Wage and London Living Wage apply to workers aged 18 and over.