National Minimum Wage – Legislative changes planned for October 2008Monday, June 16th, 2008
In an Impact Assessment document, the Department for Business, Enterprise and Regulatory Reform (DBERR) has
- confirmed the increases to the National Minimum Wage (NMW) recommended by the Low Pay Commission to take effect from 1 October 2008, and
- provided details of an increase in the NMW exemption for Work Trials from a period of 3 weeks to 6 weeks.
The new NMW hourly rates from October 2008, other than for groups of workers who are exempt from the provisions, are:
- £3.53 for workers aged 16 and 17
- £4.77 for workers aged 18 to 21
- £5.73 for workers aged 22 and above.
It is anticipated that some 1 million workers will benefit from the October 2008 NMW uprating, comprising around
- 30,000 16-17 year olds
- 100,000 18-21 year olds, and
- 800,000 workers aged 22 and over.
About two-thirds of these beneficiaries are women.
Work Trials is a government programme that enables employers to take on unemployed and inactive benefit claimants for a trial period of up to three weeks. The trial period relates to a particular post and the intention is that the unemployed individual will be offered the post if the trial is satisfactory. During the trial the potential employee continues to receive benefits from DWP. Around 15,000 people annually take up one of the existing three-week trial periods.
The National Minimum Wage Regulations 1999 currently provide an exemption for work trials of up to three weeks. The Prime Minister has announced that this scheme will be extended to six weeks for some client groups, e.g. lone parents. The change is expected to increase the number of people taking up a work trial by around 10,000. An amendment to the NMW regulations is required to ensure the extended scheme is exempt, in the same way as the current scheme.
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