New national minimum wage rates announced

The Department for Business, Enterprise and Regulatory Reform has announced the new rates of the National Minimum Wage to apply from October 2009. For workers aged 22 and over, the rate will rise from the current GBP 5.73 per hour to GBP 5.80; for workers aged 18 to 21 it will rise from GBP 4.77 to GBP 4.83; and for workers aged 16 and 17 it will rise from GBP 3.53 to GBP 3.57. The Government estimates that nearly a million workers will benefit from the increased rates.

The Government also announced that the adult rate will be extended to 21-year-olds from October 2010, following a recommendation made by the Low Pay Commission (LPC). Another of the LPC’s proposals was that information on employers who have shown wilful disregard for minimum wage laws should be available. The Government has committed to develop this proposal and consider its practical implications. A response to the LPC’s recommendation that there should be a minimum wage for apprentices is expected this summer.

Business groups had pushed for the minimum wage to remain at current levels given the economic climate. The LPC states in its annual report to the Government that this year’s increase, like all those since 2006, is smaller to take account of prevailing economic conditions. Previously, the minimum wage had been rising faster than average earnings.

For more information contact our Employment Department