National Minimum Wage Changes

The national minimum wage has been increased from the 1st October 2012 but will only affect employees aged 21 and over and employees employed as an apprentice with the rates for young workers’ being frozen.

The new rates that will come into force for the years 2012/13 are as follows:

  • £6.19 per hour for workers aged 21 and over – a rise of 11p from £6.08 per hour in 2011/12
  • £4.98 per hour for 18-20 year olds – frozen at 2011/12 rates
  • £3.68 per hour for workers above school leaving age but under 18 – frozen at 2011/12 rates
  • £2.65 per hour for apprentices – a rise of 5p from £2.60 per hour in 2011/12

 Reaction to these changes has been met with mixed opinions. 

Business Secretary Vince Cable commented: “I believe that the recommendations of the Low Pay Commission strike the right balance between pay and jobs, and have therefore accepted all the rate recommendations. The Low Pay Commission has done a good job in difficult circumstances. In these tough times freezing the youth rates has been a very hard decision – but raising the youth rates would have been of little value to young people if it meant it was harder for them to get a job in the long run.”

British Chamber of Commerce (BCC) Director General John Longworth said: “We are disappointed that the government has chosen to raise the adult National Minimum Wage rate by 1.8%, far above our recommendation. While the pressures of inflation are hurting many people, especially the lowest-paid, this decision adds significantly to the cost of doing business, and feeds wage inflation at higher levels. In his Budget on Wednesday, the Chancellor should offset the hike in the National Minimum Wage by scrapping the huge business rate rise which will affect many businesses from April. This rate rise will stop many from employing more people, whether on minimum wage or above.”

 

For further advice on how these changes impact you or your business, please contact us on: 0845 365 1000 or email help@hsj.uk.com  to arrange a consultation.