Changes to minimum wage rates imminent

minimum wageEmployers are being reminded that new national minimum wage rates will be coming into effect in October.

There is also a new rule affecting 21-year-olds.

As from 1 October, employees will no longer have to be aged 22 to become eligible for the top hourly minimum wage adult rate.

The new rates are: £5.93 per hour for low paid workers aged 21 and over, up from  £5.80; £4.92 per hour for 18-20 year olds, up from £4.83; and £3.64 per hour for 16-17 year olds, up from £3.57.

For the first time there will be 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.

The accommodation offset will rise from £4.51 per day to £4.61.

Edward Davey, the employment relations minister, said: The increases to the national minimum wage this year are appropriate for the economic climate. They will strike a balance between helping the lowest paid whilst at the same time not jeopardising their employment. 

“The Low Pay Commission estimates that around 970,000 people stand to benefit from these increases. 

“Workers on the national minimum wage are disproportionately likely to be employed by small firms and so it is right the Low Pay Commission considers their competitiveness when they make their recommendations for next year. SMEs will be vital to our economic recovery.”

The move to reduce qualification for the adult minimum wage to 21 will, however, push up business costs.

The Business Department has estimated that the cost to employers will be £48 million.

It is thought that the change will see some 85,000 extra workers lifted into the adult wage category.

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