The national minimum wage applies to nearly all workers and sets hourly rates below which pay must not be allowed to fall. It helps business by ensuring companies will be able to compete on the basis of quality of the goods and services they provide and not on low prices based predominantly on low rates of pay. The rates set are based on the recommendations of the independent Low Pay Commission.
The National Minimum Wage will increase again in October 2006
The minimum wage is a legal right which covers almost all workers above compulsory school leaving age. There are different minimum wage rates for different groups of workers as follows:
- The main rate for workers aged 22 and over is currently set at £5.05 an hour. On 1 October 2006 this will increase to £5.30
- The development rate for 18-21 year olds is currently set at £4.25 an hour this will increase to £4.45 on 1 October 2006
- The development rate for 16-17 years olds. This rate is £3.00 an hour. This will increase on 1 October 2006 to £3.30 an hour
On 1 October 2006 the rate of the accommodation offset will increase to £29.05 per week (£4.15 per day). The current rate is £27.30 per week (£3.90 per day)
- It is important to note that these new rates only apply to pay reference periods beginning on or after the date they came into law.
- From 1 October 2006 , the Employment Equality (Age) regulations will abolish the Older Workers Development Rate and remove the age limit on the apprenticeship exemption.
16 and 17 year olds rate
The Government accepted the Low Pay Commission's recommendations for a new rate for 16 and 17 year olds (above compulsory school leaving age)* in their 2004 report.
£3.00 per hour from 1 October 2004. This will increase to £3.30 in October 2006
NB: 16 and 17 year old apprentices are exempt from the young workers rate.
For more information please view http://www.dti.gov.uk/er/nmw/index.htm