New minimum wage rate and new rate for apprentices announced
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Issued on 25 March 2010
New £5.93 minimum wage rate and new rate for apprentices announced
The Government has today confirmed that it has accepted the
recommendations from the Low Pay Commission (LPC) on the new rates for the
National Minimum Wage, as referred to in yesterday’s Budget.
The new rates, which will come into force on
1 October 2010 will be:
£5.93 per hour for low paid workers aged 21 and over (a 2.2% increase on
the current £5.80 rate);£4.92 per hour for 18-20 year olds (a 1.9% increase
on the current £4.83 rate); and£3.64 per hour for 16-17 year olds (a 2%
increase on the current £3.57 rate.
The Government also announced that it had accepted the LPC’s
recommendation to introduce an apprentice minimum wage of £2.50 per hour.
The new rate will apply to those apprentices who are under 19 or those that
are aged 19 and over but in the first year of their apprenticeship.
Business Minister Pat McFadden:
“Since the National Minimum Wage was introduced millions of low paid
workers across the country have benefited by having their wages increased.
“The Low Pay Commission, which includes employers and Trade Union
representatives, carefully considered the latest economic data and evidence
before making its recommendations, balancing the needs of businesses and
workers.
“Today’s recommendations provide a welcome increase for workers, but the
economy is still fragile and government must continue to support the
recovery in the months ahead.
“I’m also glad to see the LPC recognising the significant contribution
that apprentices make to the economy. I hope this will encourage more people
to take advantage of this opportunity and invest in their skills by taking
up an apprenticeship.”
Low Pay Commission Chairman David Norgrove said:
“We are pleased that the Government has again accepted the Commission’s
recommendations. The introduction of an apprentice rate marks an important
extension to minimum wage protection across the UK.”
The Government also published its strategy for ensuring compliance with
National Minimum Wage legislation over the next three to five years.
The strategy builds on the last 10 years and sets out the Government’s
priorities for ensuring that workers receive the wages they are entitled to.
Notes
1. The Low Pay Commission was established following the National
Minimum Wage Act 1998 to advise the Government about the National Minimum
Wage. Its commissioners include representatives from business groups, trades
unions and academics. For more details, and copies of the full report, see
http://www.lowpay.gov.uk/
2. When the minimum wage was launched in 1999, the main rate was
£3.60.
3. The LPC makes recommendations to the Government in its annual
report. In addition to the rate increases, the Government has accepted the
recommendations that:
the adult hourly rate of the minimum wage should increase from £5.80
to £5.93;increasing the development rate (which will cover workers aged
18-20 years) from £4.83 to £4.92; that the rate for 16-17 year olds movers
from £3.57 to £3.64. They recommend that these changes take place in October
2010;there should be a single apprentice minimum wage rate of £2.50 per hour
for those apprentices currently exempt from the National Minimum Wage; there
should be specific guidance on the National Minimum Wage for the
entertainment sector; andthat HMRC investigates whether contract and agency
cleaners in the hotel sector are receiving their entitlement under the
National Minimum Wage for their hours worked.
4. The Government notes the Commission’s recommendation that there
should be a commitment, as a minimum, to maintaining current funding in real
terms for monitoring and enforcement of the National Minimum Wage until at
least March 2014.
5. The accommodation offset will rise from £4.51 per day to £4.61.
6. The Pay and Work Rights helpline number is 0800 917 2368. As well
as receiving and investigating complaints about non-payment of the minimum
wage, the helpline offers advice and information in more than 100 languages.
7. The Low Pay Commission estimates that just over 950,000 people
stand to benefit from the increase.
8. The National Minimum Wage Compliance strategy is available at
http://www.berr.gov.uk/whatwedo/employment/pay/index.html
Please contact the Department for Business press office on 0207 215
3496 for more information.
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