As most readers are no doubt aware national minimum wage rates were subject to their usual increase on 1 October. The main rate has increased from £6.08 to £6.19.
The rates for workers aged 16-17(£3.68) and 18-20 (£4.98) are unchanged this year.
The apprentice rate has increased from £2.60 to £2.65 and the accommodation offset (which employers providing accommodation can set off against the minimum wage) has increased from £4.73 to £4.82 per day.
The TUC has pointed out that those on the minimum wage (who are mainly women) will experience a net drop in spending power in real terms, taking into account that the rise in the main rate is 1.8% whereas RPI inflation is currently 2.9%. General Secretary Brendan Barber commented:
While we are pleased that Government has rejected the siren calls of some employers to freeze the minimum wage for adult workers and apprentices, these increases are still far below inflation and will leave the lowest-paid facing a real terms cut.
These new rates are a particular blow to younger people who will face the biggest hit on their living standards. There is no evidence that the minimum wage has had an adverse impact on young people’s employment so it is hard to see the logic behind their pay freeze.
[These] increases do not do enough to help hard-pressed families. We need a bolder increase next year otherwise the real incomes of minimum wage workers will continue to fall, along with consumer demand.
Also on 1 October auto-enrolment came into force for the biggest employers Continue reading
Domestic workers living as part of the family for whom they work can fall under the “au pairs and nannies” exception to the right to be paid minimum wage. Other exceptions listed in the Regulations include members of the armed forces, share fishermen, prisoners and, fairly obviously, volunteers and the self-employed. Of course, interns or trainees are not excepted and this has generated a good deal of recent media interest. The au pair exception – and how to determine whether a person falls within it, was recently examined by the Employment Appeal Tribunal (EAT) in Jose v Julio (and other linked cases).
The National Minimum Wage Regulations 1999 provide particular guidance as follows: Continue reading
Both the National Minimum Wage Regulations 1999 (NMW) and the Working Time Regulations 1998 (WTR) call for calculations of "working time", so there is a temptation to assume that the words mean the same thing in both provisions. But beware – there is a crucial difference when it comes to periods when a worker is on stand-by.
Contrast Baxter v Titan where, in the context of the NMW, periods a chauffeur spent away from home between assignments where he was able to sleep over at a hotel were not working time, with Wray v JW Lees & Co (Brewers) Ltd where periods where a temporary pub manager was required to remain on work premises but was permitted to sleep did not count for minimum wage but, it was accepted, could count as working time for the purposes of the WTR. Continue reading
The annual National Minimum Wage (Amendment) Regulations which increase the National Minimum Wage from the 1 October each year have now been laid before Parliament in draft form. Following the recommendations of the Low Pay Commission, they will provide for increases in the National Minimum Wage from 1st October 2011 as follows: Continue reading
The Government has announced that it is accepting the National Minimum Wage recommendations in the Low Pay Commission’s 2011 report.
Accordingly increases in the National Minimum Wage will come into effect on 1 October 2011 as follows:
- The adult rate will increase by 15p to £6.08 an hour;
- The rate for 18-20 year olds will increase by 6p to £4.98 an hour;
- The rate for 16-17 year olds will increase by 4p to £3.68 an hour;
- The rate for apprentices will increase by 10p to £2.60 an hour; and
- The accommodation offset will increase from £4.61 to £4.73 per day.
You may also be interested to read the post on “interns” and the NMW in this month’s update.
New rates for the National Minimum Wage (NMW) come into effect today. They are:
- £5.93 per hour for low paid workers aged 21 and over, increased from £5.80 and with the adult rate coming into effect at 21 rather than the previous 22;
- £4.92 per hour for 18-20 year olds, increased from £4.83; and
- £3.64 per hour for 16-17 year olds, increased from £3.57
There is also a new apprentice rate set at £2.50 per hour for those under 19 or over 19 but in the first year of their apprenticeship. All other apprentices must be paid the standard NMW.
Coinciding with the increases the Government has announced a crackdown on employers who routinely or deliberately pay below the minimum rates. From 1 January 2011 defaulting employers will have their breaches publicised by the Department for Business Innovation and Skills. Announcing the new approach Employment Relations Minister Edward Davey said:
Bad publicity can be a powerful weapon in the fight against employers who try to cheat their workers and their competitors. Their reputation can be badly damaged if they are seen to be flouting the law.
Responsible employers should also make themselves aware of the new rates that come into effect [1 October]. 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.
Draft regulations have now been published which will make the following main changes to the National Minimum Wage with effect from 1st October 2010:
- the principal rate of the national minimum wage increases from £5.80 to £5.93 per hour;
- the age at which the principal rate becomes payable is reduced from 22 to 21;
- the rate for workers aged between 18 and 20 increases from £4.83 to £4.92 per hour;
- the rate for workers aged below 18 who have ceased to be of compulsory school age increases from £3.57 to £3.64 per hour;
- apprentices employed under a contract of apprenticeship who are within the first 12 months of that employment or who have not attained the age of 19, will receive a national minimum wage of £2.50 per hour;
- the “accommodation amount”, applicable where an employer provides a worker with living accommodation, increases from £4.51 to £4.61 per day.
Although there is no formal confirmation yet on the Agricultural Wages Board website, it is understood that the annual review of the agricultural minimum wage (effective on 1 October each year) has settled on an average increase of 2.4% from 1 October 2010. An Agricultural Wages Order can be expected in due course.
Meanwhile, Boris Johnson, the mayor of London, has announced a 25p increase in the London living wage, bringing it to £7.85 per hour. There is of course no statutory compulsion on London employers to pay more than the national minimum wage. The London living wage is calculated by the Greater London Authority and is designed to take into account higher costs of living in London rather than elsewhere. There is a web-page listing employers who have committed to pay London staff the London Living Wage rather than the National Minimum Wage.
Finally, it is worth noting that the NMW has teeth. An optician in Manchester, Benjamin Gains, has recently been fined £3,696 for National Minimum Wage offences. He had paid his staff up to 40% less than that to which they were entitled and attempted to hide the fact that he wasn’t paying what he should by falsifying employee information.