Last week, the government announced a 3.2% increase in the adult rate, from £5.35 to £5.52 per hour, with effect from October 2007. But staff in the 18- to 21-year-old bracket will only be paid a minimum rate of £4.60 per hour.
EFA director Sam Mercer said this sent out “completely the wrong message” to employers about the consequence of making decisions based on age in the workplace. “We are frustrated by the refusal to address the fact that under the current bands, 18- to 21-year-olds are paid less, simply because of their age and irrespective of their capabilities or responsibilities,” she said.
The EFA call for action follows a warning from lawyers that the NMW flouts the new age laws and that apprenticeships specifically targeted at younger people would eventually be proved illegal.
Age discrimination in employment became illegal on 1 October 2006. The EFA is lobbying the government on the issue of minimum wage age bands. An Early Day Motion has been tabled in Parliament and now has 88 signatures representing cross-party support.
“The current argument from the government that employers might potentially avoid taking on younger workers if they had to pay them the same amount as workers over 21 is simply reinforcing the discriminatory practices that the legislation was designed to eradicate,” Mercer said.
Employers’ and unions’ views on the NMW rise
EEF: “We are pleased the government has recognised the additional costs that many employers will face when statutory annual holiday entitlement increases in October.”
CBI: “The NMW has brought real benefits to many lower-paid workers, but it is right that this year’s increase took account of business reality.”
CIPD: “If the NMW is to succeed, it must be set at a rate that improving pay at the bottom of the labour market does not have adverse consequences for jobs, inflation or the wider economy.”
T&G: “We are concerned that the progress that has been made in tackling inequality could be rolled back if the minimum wage fails to even keep pace with inflation.”
GMB: “The figure of £5.52 is still well short of half of the UK average hourly rate for full-time workers.”
TUC: “Everyone stands to gain from making the minimum wage as robust as possible, so the government should use this year to continue moving its enforcement work up a gear.”