What are the 2022 National Minimum Wage changes for salons?

Back in October 2021, Chancellor Rishi Sunak delivered the Autumn Budget and Spending Review, which outlined Government spending for the next three years. 

He announced rises in the NMW (National Minimum Wage) and NLW (National Living Wage) starting in April 2022 in his Budget.

The NLW will increase to £9.50 from £8.91, and the NMW will also increase across the various age groups. Apprenticeship pay will go up from £4.30 to £4.81. But don’t be caught out: an apprentice over the age of 19 who is in the second year of their apprenticeship must be paid the age-appropriate NMW/NLW. 

Employers should update their payroll to ensure that the NMW/NLW increases from April 1, 2022, are taken into account. The pay increase should also be confirmed in writing to employees.

NHBF’s free expert guide to the NMW and NLW is available to NHBF members only. It includes detailed information about how the NMW and NLW impact the hair, beauty and barbering industry.

Find out more about becoming an NHBF member and join now for less than 80p a day.

What’s the difference between Real Living Wage and National Living Wage?

Some people may confuse the NLW with the Real Living wage. The Real Living Wage (RLW) is only voluntary, so businesses and employers cannot be compelled to pay it. This differs from the National Living Wage, which is Government-backed and set in law, so businesses and employers must pay it.  Around 9,000 employers currently sign up to the Real Living Wage.

Since November 2021, the real living wage has increased to £9.90 per hour across the UK and £11.05 in London.

The RLW is calculated by the Living Wage Foundation, a campaigning organisation, and is based directly on cost of living.

The Real Living Wage is for everyone aged 18 and over, whereas the National Living Wage is for anyone aged 23 and over.

Stay up to date

• NLW and NMW rates change every year. Always check to make sure you are paying your salon employees the right amount.
• It’s also important to keep on top of staff birthdays – your employee may be entitled to a higher rate of pay at some point during the year. It’s a good idea to set up automatic alerts on your computer system.
• If you have an accountant, don’t rely on them to alert you to rate rises and possible underpayments – make sure you understand what’s required and that everyone working in your salon or barbershop is being paid correctly. Remember, if you get something wrong, you will be liable, not your payroll provider.

What if you realise you're not paying an employee enough?

Don’t panic! Put things right first, then notify HMRC. You will need to pay your salon employee any arrears that you owe them and make sure they are on the correct rate from now on. To notify them, employers can send a quick email to a quick email to HMRC. 

What could happen if you don’t pay the NLW or NMW?

Be aware that an employee or former employee could report you to HMRC, resulting in an investigation and a fine of up to £20,000 per worker. The government could potentially publicly name and shame you.

Coping with the costs of paying the NLW and NMW

There are three pieces of key advice when managing your budget: plan, plan, plan. To ensure the continued success and profitability of your salon, it’s vital to create a cash-flow forecast. Find out how to take control of your cash flow here.

You could also take positive steps to increase your income through innovation – for example, by offering new services or increasing your retail sales. Read the NHBF’s blog on how to maximise profits in your salon.

Thirdly, make sure you are making the most of marketing possibilities to boost your income by attracting new clients to your salon. Find out how to market your salon for (almost) free.

This guide will help you understand the basics of financial management for your business including tax, VAT, accounting and record keeping. 

Legal back-up and support from the NHBF 

The NHBF offers a wide range of invaluable benefits including NHBF unique 24/7, 365 days a year legal helpline for hair & beauty employment and HR issues – which is completely free for NHBF members.

From contracts, apprenticeship agreements, absenteeism and holidays, to redundancy, managing employee performance, and maternity arrangements, this vital legal support provides sensible and practical advice on how to deal with a range of frequent employment difficulties.

Download NHBF resources for employment.

Become an NHBF Member for less than 80p a day to take advantage of our range of additional support tools and services to help you grow a profitable business.

This is a sponsored feature in association with NHBF.