Minimum Wage to Increase by 20p per Hour
The Low Pay Commission sent its recommendations to the Government today for the 2015 Rates. The LPC recommends that the adult minimum wage increases by 20p to £6.70 per hour – a 3% increase from the current rate of £6.50. For 18-20 year olds, the Commission’s recommendation is for a 3.3% increase, to £5.30 per hour (currently £5.13). For the youngest workers, the recommendation is an increase of 2.2%, from £3.79 an hour to £3.87. Apprentices can expect to see an increase of 2.6% from 1st October, with their minimum wage increases to £2.80 (from £2.73).
Although not binding on the Government, these recommendations are normally accepted, and therefore the new rates will apply from the first Pay Reference Period after 1st October 2015. This means that the new rate does not have to apply on Thursday, 1st October, but from when the next pay cycle starts – on or after this date. (Pay reference periods cannot be more than one month for the purposes of the National Minimum Wage Regulations.)
The benefit to full-time adult staff will be £416 a year, but the cost to employers will be more, when allowing for any associated National Insurance & pension contributions.
As part of its review this year, the LPC considered the structure of the Apprentice Rate – whether this could be simplified to improve compliance – but nothing more than communication and enforcement were recommended.