National Minimum Wage – Government confirms new rates from October 2010Thursday, April 1st, 2010
The latest recommendations from the Low Pay Commission (LPC) for an increase of approximately 2% in the National Minimum Wage (NMW) rates from October 2010 have been accepted by the Government and are confirmed as follows. A new apprentice rate is introduced for the first time and, as previously announced, the adult rate applies from age 21. The LPC estimates that some 950,000 workers will benefit from the increases.
- apprentice rate – £2.50 per hour
- 16-17 year-olds – up from £3.57 to £3.64 per hour
- 18 to 20 year-olds – up from £4.83 to £4.92 per hour
- 21 year-olds and over – up from £5.80 to £5.93 per hour.
The accommodation offset will increase from £4.51 per day to £4.61.
The change to the minimum age for the adult rate means that the minimum rate for workers who are age 21 in October 2010 will increase from £4.83 to £5.93 per hour.
The new apprentice rate does not apply to all apprentices.
- Non-employed apprentices are currently exempt from the NMW and will continue to be exempt.
- Employed apprentices who are under age 19 or who are aged 19 or above in their first 12 months of apprenticeship are currently exempt from the NMW. The new £2.50 rate will apply to these apprentices in respect of all hours spent working and training.
- Other apprentices must already be paid the relevant higher rate.
The LPC also recommends that, in England, transitional arrangements are put in place so that current apprentices retain a contractual entitlement to a minimum of £95 a week for the remainder of their apprenticeship or until they would become eligible for the NMW. The government has also accepted this recommendation.
The government also accepted the LPC’s recommendations that
- there should be specific guidance on the National Minimum Wage for the entertainment sector, and
- HMRC should investigate whether contract and agency cleaners in the hotel sector are receiving their entitlement under the National Minimum Wage for their hours worked.
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