News
The Government has announced that all National Minimum Wage rates will rise in October. It is estimated that almost one million workers will see their pay increase as a result of the rise.
Implications
All age groups covered by the National Minimum Wage will benefit from an increase and therefore employers should take note of these new rates which come into effect in October.
Details
The new Minimum Wage rates are as follows:
- For workers aged 22 and over, the minimum wage will increase from £5.73 per hour to £5.80 per hour.
- For workers aged 18-21 the minimum wage will increase from £4.77 per hour to £4.83 per hour.
- For 16 and 17 year olds the minimum wage will increase from £3.53 pence per hour to £3.57 per hour.
Businesses had argued that Minimum Wage rates should be frozen this year, given the current economic downturn. However, the Low Pay Commission (who make recommendations on the level of the minimum wage to the Government) stated that this years increases were small and accordingly the current economic conditions had been taken into account.
The Low Pay Commission was established to advise the Government on the National Minimum Wage and its commissioners include representatives from business groups, trade unions and academics. The Commission not only makes recommendations as to the level of the National Minimum Wage but also which workers should benefit from it.
The Government also announced that it has accepted the Commission's recommendation that the adult rate should be extended to 21 year olds. However this change to the minimum wage will not be introduced until October 2010.
The Government is currently considering another proposal from the Low Pay Commission that a minimum wage should be introduced for apprentices. A response from the Government to this recommendation is expected in the Summer.
