Changes To The National Minimum Wage

Despite lobbying from many industry leaders across the country for a freeze in NMW rates in the face of the ongoing economic recession, the Government last month announced it would follow the recommendations of the independent Low Pay Commission and increase rates from October this year.

The resultant new National Minimum Wage rates which are effective from 1st October 2009 are as follows :

• The Adult hourly rate increases from £5.73 to £5.80 , up 7p per hour.
• The hourly rate for 18 – 21 year olds increases from £4.77 to £ 4-83, up 6p per hour.
• The hourly rate for 16 and 17 year olds increases from £3.53 to £ 3.57 up 4p per hour.

The Adult rate applies to all employees and workers aged 22 and over and the changes represent an increase of just over 1%, which is less than some commentators had predicted. However the Government also announced that it intends to apply the higher rate to employees and workers aged 21 years and above from October 2010.

In addition from October 2009 , the 2009 Budget increase in the amount of a maximum ‘week’s pay’ for calculating statutory redundancy pay is expected to take effect and this will increase the maximum from £350 to £380 per week