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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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© Crown Copyright. Material taken from the Department for Business, Innovation & Skills. Reproduced under the terms and conditions of the Click-Use Licence.



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Article Published/Sorted/Amended on Scopulus 2010-03-25 11:03:05 in Employee Articles

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