Farm labour costs set to rise as statutory wages increase

Farm labour costs will rise from this month as a result of statutory wage rises and an increase in pension contribution rates.

It is a legal requirement for a farmworker’s wages to be at least at the same level as the national minimum wage (NMW) or national living wage (NLW), both of which increase from 1 April.

In Northern Ireland, Scotland and Wales, wage rates for farmworkers are still set each year by an agricultural wages board, which take into account NLW and NMW requirements.

See also: Why it is vital to be clear on farmworker employer status 

However, in England employers are able to set their own wage rates provided they comply with NMW and NLW rates.

The national living wage is the obligatory minimum wage payable to workers in the UK aged 25 and over while the national minimum wage applies to workers who are 24 and younger.

The following minimum rates apply from 1 April 2019 

Age Wage rate
Age 25 and over  £8.21/hour
21 to 24 £7.70/hour
18 to 20 £6.15/hour
Under 18 £4.35/hour

Pension costs

Meanwhile, for those with workplace pensions under the auto-enrolment scheme, the employer’s pension contributions must also rise from a minimum of 2% of pensionable earnings to 3% from 6 April 2019.

The employee’s minimum contribution will rise from 3% to 5%.

OCTOBER
29

Farm succession planning during the Covid-19 crisis

Register now