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Minimum wage freeze for under 21’s

28th March, 2012

The Government has announced that whilst the National Minimum Wage (NMW) will increase in October 2012 for apprentices and workers aged 21 and over, there will be no increase in the NMW rates for workers aged between 18 and 20, and 16 and 17.

The announcement has the following effect on NMW rates:

–          the standard adult rate (for workers aged 21 and over) will rise from £6.08 per hour to £6.19 per hour;

–          the development rate (for workers aged between 18 and 20) will remain at £4.98 per hour;

–          the young workers rate (for workers aged under 18 but above the compulsory school age who are not apprentices) will remain at £3.68 per hour; and

–          the rate for apprentices will rise from £2.60 per hour to £2.65.

The accommodation offset will rise from £4.73 per day to £4.82 per day.

The announcement comes following the recommendations of the Low Pay Commission’s 2012 Report (“the Report”).  The Report recommends:

–          a review of all existing guidance on the NMW;

–          naming and shaming employers who infringe the rules;

–          that the Government should actively communicate the rates, rights and obligations under the NMW.

The Government has said it will carefully consider how best to achieve publicising NMW compliance activities and communicating rates.

It has been suggested that the freeze on the NMW for the development and young workers rate will make it more attractive to employ young people.

If you have any questions on how this may affect your business either now or once the new rates come into force, please do not hesitate to email Claire Brook in the Employment team or call her on 01244 405575.

 

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