Minimum Wage Update - Further Increases due October 2006
The National Minimum Wage will again increase from 1st October 2006 at the following rates:
- The main rate for workers aged 22 and over is currently £5.05 an hour and will increase to £5.35
- The development rate for 18-21 year olds is currently £4.25 an hour and will increase to £4.45
- The development rate for 16-17 years olds is currently £3.00 an hour and will increase to £3.30
Other Changes
- The Employment Equality (Age) regulations will mean that the age limit on the apprenticeship exemption will be removed and so apprentices over 18 years old will be exempt from the minimum wage for the first 12 months of employment but after this, they will be entitled to the normal minimum wage rate for their age group. (NB: there are specific definitions of an 'apprentice' and so please contact us to find out more)
- The rate for accommodation offset will increase from £27.30 to £29.05 per week
Some Background
The aim of the minimum wage since its introduction has always been to help set minimum standards in order to promote fairness at work, by ensuring workers receive a legal right to a standard rate, which is based on recommendations by the Low Pay Commission. The DTI believe that it also helps the creation of competition based on service and quality, rather than on low labour costs, promoting a fairer economy. Most 'workers' (including independent contractors), over 16 years old are eligible. Excluded groups include au pairs, family members in a business, voluntary workers and some apprentices.
Employer Records
As an employer, you must be able to show that you are paying sufficiently to meet the requirements of the minimum wage rates. Records must be kept for three years and should be kept in the form of a single document for each worker.
What if an employee believes they are not being paid the minimum wage?
- They are entitled to see the employer's records, if they have reasonable grounds to think they have not been paid the minimum wage.
- If an employer does not provide records of their pay to show that they have been paid the minimum wage, they can go to an employment tribunal.
If you have any further questions, please contact Lisa Davies by emailing lisa@hradvantage.co.uk or otherwise phone 01494 478 801.
September 2006
