Government approves new October 2012 Minimum Wage Rate
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19 March 2012 - BIS
The Government has today
accepted the independent Low Pay Commission’s (LPC) recommendations for
this year’s National Minimum Wage (NMW) rates.
The following rates will come into effect on 1 October 2012:
- The adult rate will
increase by 11p to £6.19 an hour
- The rate for 18-20 year
olds will remain at £4.98 an hour
- The rate for 16-17 year
olds will remain at £3.68 an hour and
- The rate for apprentices
will increase by 5p to £2.65 an hour.
Business Secretary Vince Cable said:
"I believe that the recommendations of the Low Pay Commission
strike the right balance between pay and jobs, and have therefore
accepted all the rate recommendations. The Low Pay Commission has done
a good job in difficult circumstances.
“In these tough times freezing the youth rates has been a very
hard decision - but raising the youth rates would have been of little
value to young people if it meant it was harder for them to get a job
in the long run.”
Chair of the LPC David Norgrove said:
“We welcome the Government's acceptance of our recommendations
on the rates for the National Minimum Wage. The Commission was again
unanimous, despite all the economic uncertainties and the different
pressures on low-paid workers and businesses. We believe we have struck
the right balance between the needs of these workers and the challenges
faced by employers.”
It was also announced today that David Norgrove has been
reappointed as Chair of the LPC. His reappointment was made under the
terms of the Code of Practice and other guidance issued by the
Commissioner for Public Appointments. He will serve a second spell as
Chair for a further term of four years from 1 April 2012 to 31 March
1. The Low Pay Commission was established following the
National Minimum Wage Act 1998 to advise the Government on the National
Minimum Wage. It is made up of representatives from all sides of
industry. For more details and copies of the report see http://www.lowpay.gov.uk/
2. The LPC makes recommendations to the Government in its
annual report. The Government has accepted
the following recommendations:
• that the adult rate is increased by 11 pence to £6.19 an
hour from 1 October 2012
• a Youth Development Rate of £4.98 an hour and a 16-17 Year
Old Rate of £3.68 an hour from 1 October 2012
• that the Apprentice Rate be increased by 5 pence to £2.65 an
hour from 1 October 2012
• that the accommodation offset should be increased by 9 pence
to £4.82 per day from 1 October 2012
• that in order to make operating the National Minimum Wage as
simple as possible for all users, the Government puts in place, and
maintains, effective, clear and accessible guidance on all aspects of
the minimum wage particularly where there is significant evidence of
ignorance or infringing practice. As a first step, the Government
should undertake a review of all existing guidance.
The Government has noted the
• that the Government should not only have a process for
naming infringers but should also make frequent use of it. The
Government should also actively seek other publicity opportunities
which will help to signal that those who infringe the National Minimum
Wage get caught and punished.
• that the Government should more actively communicate both
the rates themselves and rights and obligations under the National
Minimum Wage. Communication activities about the minimum wage should
not be subject to the Government’s marketing freeze.
3. The LPC monitors and evaluates the impact of the NMW, with
particular reference to the effect on pay, employment and
competitiveness in low paying sectors and small firms; the effect on
different groups of workers; the effect on pay structures; and the
interaction between the minimum wage and the tax and benefit systems.
The Commission reviews the level of the NMW adult rate and the
development rates and makes recommendations, if appropriate, for change.
4. The Government published the remit for the LPC’s 2012
Report in June 2011, asking them to specifically consider the position
of young people. The remit can be found here http://www.lowpay.gov.uk/
5. David Norgrove studied in Oxford and Cambridge. He has a BA
Modern History, Diplomas in Economics, and Accounting and Finance, and
an MSc in Economics from LSE. He has had a distinguished career in both
private and public sectors, including as Marks and Spencer Executive
Director for Clothing and International; Chairman of the Marks and
Spencer Pension Scheme and 16 years in the civil service.
6. The appointment will require a commitment on average of two
days a month and will include chairing monthly meetings in London,
Commission Visits and representing the Commission. Remuneration is on
the basis of a daily rate of £523.11, which is currently unclaimed by
7. All appointments are made on merit and political activity
plays no part in the selection process. However, in accordance with the
original Nolan recommendations, there is a requirement for appointees’
political activity (if any declared) to be made public. David Norgrove
has declared no such political activity.
8. He currently holds the following public appointment as a
Trustee of the British Museum, ending April 2012, which is unpaid.
About the Author
© Crown Copyright. Material taken from the BIS Department for Business, Innovation and Skills. Reproduced under the terms and conditions of the Click-Use Licence.
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Article Published/Sorted/Amended on Scopulus 2012-03-19 12:17:09 in Employee Articles