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Extra cash this Autumn for a million workers


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Around one million workers across the UK will soon have a little extra money in their pockets as the National Minimum Wage (NMW) increases on Wednesday (October 1).

The rate is rising to 5.73 per hour for workers aged 22 and over, 4.77 for 18-21 year olds and 3.53 for those aged 16 and 17.

The Government is also currently preparing a further crackdown on bosses who fail to pay the minimum wage, with tough new penalties set to come into force next April. An information campaign over the next six months will aim to make sure that every employer is aware of the changes.

Employment Relations Minister, Pat McFadden, said:

"Ten years ago, the National Minimum Wage was born, marking the start of a hard-fought campaign to introduce a basic standard of employment rights that every worker could be protected by. The minimum wage has made a lasting and significant difference to the low paid, with around a million workers benefiting from the increase each year.

"It's vital that we safeguard this right with effective enforcement, which is why we're bringing in tough new penalties for those who flout the law.

"The vast majority of employers treat their workers fairly and have nothing to fear from these changes. In fact, stronger enforcement will help prevent rogue bosses from undercutting honest competitors."

The Employment Bill, currently before the Parliament, will introduce an automatic fine of up to 5,000 for businesses found underpaying their workers. The most serious cases will be tried in a Crown Court, which will have the power to impose unlimited penalties.

The Bill also includes a fairer method for dealing with minimum wage arrears - calculated so that workers do not lose out as a result of underpayment.

Anyone who is concerned they may not be getting the National Minimum Wage can call the NMW helpline on 0845 6000 678 (or 0845 6500 207 from Northern Ireland) for confidential advice or to register a complaint about underpayment. Support is offered in more than 100 languages and callers can remain anonymous of they wish.

In the last year alone, HMRC enforcement officers investigated more than 4,100 employers and secured almost 3.9million in arrears for over 19,000 workers.

Since the minimum wage was introduced in April 1999, the Government has returned over 30million unpaid wages to more than 100,000 workers.

Table 1. Estimated number of workers that stand to benefit from October 2008 National Minimum Wage uprating by age and sex

                 Male             Female                Total
      16-27            20,000           10,000                30,000
      18-21            50,000           40,000                100,000
      22 and over      260,000          530,000               800,000
      Total            330,000          590,000               920,000 



Table 2. Estimated number of workers that stood to benefit from the October 2008 National Minimum Wage increase by country and government office region.

Country or region                               Beneficiaries
      Wales                                           50,000
      Scotland                                        90,000
      Northern Ireland                                40,000
      England                                         740,000
      North-East                                      60,000
      North-West and Merseyside                       120,000
      Yorkshire & Humberside                          80,000
      East Midlands                                   80,000
      West Midlands                                   100,000
      Eastern                                         80,000
      London                                          70,000
      South East                                      90,000
      South West                                      70,000
      United Kingdom                                  920,000 


Source: BERR estimates based on ONS' Annual Survey of Hours and Earnings (ASHE) 2007

Note: These data are based on 1p pay bands from ONS ASHE and take account of actual and forecast average earnings inflation between the period Spring 2007 and October 2008: uprating from 3.40 to 3.53 for 16-17 year olds, 4.60 to 4.77 for 18-21 year olds and from 5.52 to 5.73 for those 22 and over. ASHE 1p pay bands measure number of jobs therefore coverage estimates assume workers do not hold more than one job at the NMW. Figures have been rounded to the nearest 10,000. Numbers may not sum total due to rounding.

      BERR Region        No. of Cases        No. workers Arrears
      East               290                 386          181.087.00
      East Midlands      192                 632          165.353.00
      London             560                 933          277,427.00
      Merseyside         66                  84           43,980.00
      North East         235                 721          930,208.00
      North West         476                 816          227,910.00
      Northern Ireland   234                 781          226,271.00
      Scotland           372                 3349         328,163.00
      South East         409                 7907         661,408.00
      South West         323                 648          231,143.00
      Wales              345                 263          158,036.00
      West Midlands      235                 251          135,752.00
      Yorks/Humberside   372                 2493         332.215.00
      TOTAL              4109                19264        3,898.953.00 



1. The NMW, introduced on April 1 1999, forms part of the Government's overall strategy to establish fairness in the workplace and ensure that all workers receive at least the minimum hourly rates

2. The minimum wage has risen by 59 per cent since it was first introduced. Combined with Working Tax credits and other benefits, the new rates will guarantee an income of at least 292 a week for families with one child and one full-time worker

3. The Department for Business is responsible for National Minimum Wage policy. HM Revenue and Customs has operational responsibility for enforcing the minimum wage

4. The minimum wage rates are set in response to recommendations by the independent Low Pay Commission, (LPC) whose members include employers, employee groups and academic experts. The Commission carries out a wide-ranging consultation and fact-finding exercise before arriving at its recommendations

5. The Department for Business helps UK business succeed in an increasingly competitive world. It promotes business growth and a strong enterprise economy, leads the better regulation agenda and champions free and fair markets. It is the shareholder in a number of Government-owned assets and it works to secure, clean and competitively priced energy supplies

About the Author

Crown Copyright. Material taken from the BERR- Department for Business, Enterprise and Regulatory Reform replacing DTI - Department for Trade and Industry. Reproduced under the terms and conditions of the Click-Use Licence.

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Article Published/Sorted/Amended on Scopulus 2008-09-30 11:43:55 in Employee Articles

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