New Minimum Wage Rates

The Government has announced that it has accepted the recommendations of the Low Pay Commission (LPC) on new rates for the National Minimum Wage (NMW) that will come into force on 1 October 2010.

As announced last year, the adult rate of the NMW is to be extended to 21-year-olds when the new rates come into effect.

The revised rates are as follows:

• The adult hourly rate of the NMW will increase from £5.80 to £5.93;
• The development rate (which will cover workers aged 18-20 years) will increase from £4.83 to £4.92; and
• The rate for 16-17 year olds will increase from £3.57 to £3.64.

The Government also announced that it has 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 who are aged 19 and over but in the first year of their apprenticeship.

In addition, the LPC recommends that there should be specific guidance on the NMW for the entertainment sector and that HM Revenue and Customs should investigate whether contract and agency cleaners in the hotel sector are receiving their entitlement under the NMW Regulations for their hours worked.

From 1 October 2010, the accommodation offset will rise from £4.51 per day to £4.61.