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Increase to National Minimum Wage

23rd April, 2011

The Government announced on 7 April 2011 that the National Minimum Wage (NMW) for workers over 21 will increase to £6.08 from 1 October 2011.

The NMW for adult workers is currently £5.93 so the 15p rise equals a 2.5% increase.

In addition to the rise for adults, the rate for 18-20 year olds is increasing (up 6p to £4.98), as is the rate for 16-17 year olds (up 4p to £3.68) and apprentices (up 10p to £2.60).

The announcement followed the recommendations of the Low Pay Commission (LPC), outlined in their 12th annual report. The LPC stated that their recommendation to increase the NMW reflected ‘the continued volatility in the UK economy, the state of the youth labour market and the uncertain prospects for the coming year’ and that after consultation and consideration of the evidence the recommendations struck a balance between ‘caution and optimism.’

The Government clearly agreed with the LPC as they announced changes, with Business Secretary Vince Cable stating that more than 890,000 of Britain’s lowest-paid workers stood to gain from the changes.

It is vital that employers take notice of the changes to the National Minimum Wage as a qualifying worker who is not being paid NMW could potentially make claims against his employer for breach of contract and/or unlawful deduction of wages.

In addition, HMRC (or agricultural wage inspectors in the agricultural sector) can enforce the NMW, with officials having the power to conduct random inspections, request documentation or records and issue notices of underpayment. Failure to comply with such a notice could lead to prosecution and/or civil proceedings.

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