Government approves national minimum wage increase

The national minimum wage will increase by 12p an hour to £6.31 for adults and by 5p an hour to £5.03 for 18- to 20-year-olds, the Government has announced.

The increases, which will come into force in October, follow recommendations by the Low Pay Commission (LPC), which were accepted by business secretary Vince Cable.

In addition to these changes, the Government has also announced an increase in the apprentice minimum wage rate, which will increase by 3p an hour to £2.68. This is despite the LPC’s recommendation that the apprentice rate should be frozen.

Cable said: “The independent LPC plays a crucial role in advising the Government when setting the national minimum wage every year. It balances wages of low-paid workers against employment prospects if the rate was set too high.

“We are accepting its recommendations for the adult and youth national minimum wage rate increases, which I am confident strikes this balance. However, there is worrying evidence that a significant number of employers are not paying apprentices the relevant minimum wage rate.

“Apprenticeships are at the heart of our goal to support a stronger economy and so it is important to continue to make them attractive to young people. Therefore, I am not taking forward the LPC’s recommendation to freeze the apprenticeship rate due to non-compliance, but instead am raising it in line with the youth rates.”

The Government also said it will set out to improve awareness of rights and responsibilities on pay and will embark on an enforcement programme to prevent non-compliance by employers of apprentices.

The increase and enforcement programme announcements were welcomed by the Chartered Institute of Personnel and Development (CIPD).

Ben Willmott, CIPD head of public policy, said: “The announcement to increase the minimum wage for adults by 1.9% and to increase the youth and apprenticeship rate by 1% is a welcome one. CIPD research has found that most employers support the concept of the minimum wage and support increasing it to boost the living standards of lower-paid workers. This is particularly important given the Government’s efforts to reform the benefit system and incentivise work, especially for the long-term unemployed.

“We also welcome the announcement that there will be a stronger set of measures put in place to enforce the minimum wage. Many employers already pay more than the minimum wage, particularly for apprenticeships, but it is good to see that more will be done to ensure that the small minority of rogue businesses that are exploiting their workers by not acting within the law will be brought to justice.”

XpertHR FAQs on the national minimum wage

Does an employer need to provide evidence that it is meeting the requirements of the national minimum wage?

Are employers required to pay apprentices the national minimum wage?

Can employers use tips to count towards payment of the national minimum wage?

Can accommodation provided to employees be taken into account when calculating payment of the national minimum wage?

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