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October 1st change in minimum wage

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Starting October 1st 2010, employees on minimum wage will embrace a slight governmental increase in hourly rates but employers who fail to heed new rules could find themselves in financial trouble.

While the past few years have heralded worrying times in the employment market, millions of workers will receive a cash injection from October 1st and for the first time apprentices will be protected under minimum wage legislation.

The increase is as follows:

• Workers aged 21 years and over will be entitled to £5.93 per hour
• Workers aged 21 and over who are in the first six months of working for a new employer and are undergoing training for a recognised qualification will get £4.92 per hour
• Workers aged 18-20 will be entitled to £4.92 per hour
• Young workers aged 16-17 who have reached the end of compulsory education will be entitled to £3.64 per hour

Employers should also take note of two important changes in addition to wage rises. Firstly, that workers aged 21 and over will be entitled to adult rates, down from 22 and over. Secondly, apprentices in the first year of training, and those under 19, will be entitled to £2.50 per hour.

Since the minimum wage came into effect in April 1999, it has increased by 64%. This has helped to narrow the pay gap between male and female employees by around 5% in the past decade.

The Trades Union Congress claims that two-thirds of minimum-wage employees are female, meaning roughly 670,000 women and 330,000 men will receive a welcome pay rise.

However, an impact assessment of the changes admitted that the cost to business, charities and voluntary bodies of moving 21-year-olds to the adult rate will be approximately £48 million.


Written by Andrew Hodges

October 3, 2010 at 2:38 pm

Posted in Comment, LinkedIn

Tagged with , ,

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