Interim uplift to pay in line with National Living Wage from 1 April 2023

In November 2022, the government announced an increase to the National Living Wage (NLW), effective from 1 April 2023. The hourly rate will be raised to £10.42.

Without intervention to increase the current band 1 spot salary and the entry point of band 2 (current hourly rates of £10.37), both will be non-compliant with the NLW until the 2023/24 pay award is implemented.

As an interim measure to ensure compliance with the NLW, the Department of Health and Social Care (DHSC) has confirmed the following:

• the band 1 spot salary and entry point of band 2 will be uplifted to £10.57 per hour
• this increase will take effect from 1 April 2023
• the increase to these two pay points is an advance on the 2023/24 pay award.

No changes to any other pay points will be made at this time.

The electronic staff record (ESR) team is working to amend the payroll system to ensure the uplifts occur automatically from 1 April 2023, preventing the need for any manual intervention. Details on this will be provided in the forthcoming ESR release communication.

Updated pay scales have been created to reflect these changes from 1 April 2023.

Important – interaction with the 2023/24 pay award

The DHSC has advised that the uplift to the minimum hourly rate, as set our in this guidance note, should be seen as an advance on the 2023/24 pay outcome.

An offer has been put to unions on pay for 2023/24 which, if accepted, would increase the rate for lowest paid staff in the NHS to £11.45. This offer is out for consultation with trade union memberships. If the offer is accepted and ratified by the NHS Staff Council, work will be undertaken to embed this new £11.45 rate in the payroll system, backdated to 1 April 2023.

When the full 2023/24 Agenda for Change pay award for these pay points is finalised, they will be increased by any amount not already received through the early uplift, and this outstanding amount will be backdated to 1 April 2023.

Next steps

The next steps for employing organisations will be to:

1. Review ESRs forthcoming release communication (once available) and identify where any additional local or manual interventions may be required to ensure pay for all affected staff is amended.
2. Identify any affected staff and ensure the appropriate remedy is applied. This may include:
   a) identification of band 1 spot salary and band 2 (entry point) staff and ensuring pay is uplifted to £10.57 per hour
   b) ensuring national minimum wage rates are maintained for any staff impacted by salary sacrifice arrangements
   c) ensuring rates for bank staff, employed under local arrangements, are uplifted in line with the national living wage, as a minimum
   d) staff undertaking an apprenticeship receive appropriate uplifts in line with the statutory provisions. This will include consideration of Annex 21 (paragraph 4) provisions of where staff are employed under these arrangements.
3. Communicate the position with all affected staff which may include:
   a) making clear that the uplift should be seen as an advance on the 2023/24 pay award
   b) highlighting where any interaction with salary sacrifice may occur.
4. Continue to provide existing band 1 staff with the opportunity to transition to band 2 roles.