Minimum wage increase

For pay reference periods beginning on or after Monday 1 October 2007, the adult, development and young workers rates of the National Minimum Wage (NMW) are increased as follows:
  • £5.52 an hour for workers aged 22 and over;
  • £4.60 an hour for workers aged 18-21; and
  • £3.40 an hour for workers under 18 who have ceased to be of compulsory school age, with apprentices aged 16 and 17 exempted
The per day value of the accommodation offset that can be taken into account in calculating the NMW for workers who are provided with housing as part of their job increases to £4.30. This is a maximum figure. If the worker incurs a further deduction, this amount cannot count towards the calculation of the worker’s pay for NMW purposes.

The Low Pay Commission responsible for advising the government on the workings of the NMW stated that the “cautious approach this year should not be taken as a signal that the minimum wage is too high”. Increases for 2008 are likely to be around the predicted rise in average earnings, dependent upon prevalent economic and labour market conditions at the time.

From 1 October 2007 workers exempt from qualifying for the NMW include those:
  • participating in the Programme Led Apprenticeships scheme (learning courses related to apprenticeships) in England; and
  • attending a period of work experience not exceeding twelve months whilst undertaking a specified further education course
The Employment Simplification Bill will provide the legislative framework to implement improvements in the enforcement of the NMW and any changes in respect of voluntary workers as to whether the current exclusion can be expanded. The government is proposing a mandatory penalty, applicable whenever arrears are identified, which escalates if the amount remains unpaid or the penalty is ignored.

Paul Tew, Pay Magazine
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