Legal Updates

Employment: Changes to National Minimum Wage

On the 1 October 2004, the national minimum wage (NMW) increased. The NMW is a key aspect of the Government's strategy for improving the minimum standard and fairness for employees in the workplace.

NMW is applicable to all businesses and is the minimum amount that an employer has to pay its workers. The Government see NMW as a way of ensuring that businesses compete on the basis of the quality of their goods and services, as opposed to low prices which are frequently achieved through low pay. The rates are based on the recommendations of the Independent Low Pay Commission.

The NMW rates are as follows:

  • Main Rate for Workers Aged 22 and over increases from £4.50 to £4.85 per hour.
  • Development Rate for Workers Aged 18 - 21 (inclusive) increases from £3.80 to £4.10 per hour.
  • New Young Workers rate for 16 and 17 year old workers who are above the Compulsory School Leaving Age is £3.00 per hour

The Development Rate
- The development rate can still apply to workers ages 22 and over, but only during the first 6 months of their employment with a new employer and where they are receiving accredited training.

New Young Workers Rate - Apprentices between the ages of 16 and 17 are exempt from the new young workers rate.

The Compulsory School Leaving Age
- Ends after the last Friday in June of the school year in which the worker's 16th birthday occurs.

Note: Employers must ensure that they abide by the National Minimum Wage as failure to do so is an unlawful act and could result in claims against them for breach of the Act.

If you require further information contact us.

Email: Dr Rosanna Cooper

© RT COOPERS, 2004. This Briefing Note does not provide a comprehensive or complete statement of the law relating to the issues discussed nor does it constitute legal advice. It is intended only to highlight general issues. Specialist legal advice should always be sought in relation to particular circumstances.




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