The National Minimum Wage is an important cornerstone of Government strategy aimed at providing employees with decent minimum standards and fairness in the workplace. It applies to nearly all workers and sets hourly rates below which pay must not be allowed to fall. It helps business by ensuring companies will be able to compete on the basis of quality of the goods and services they provide and not on low prices based predominantly on low rates of pay. The rates set are based on the recommendation of the independent Low Pay Commission. The Government has announced an increase to the National Minimum Wage rates, which will take place from 1 October 2004. The present and new rates are set out below:

Main (adult) rate for workers aged 22 and over

£4.50 per hour from 1 October 2003

£4.85 per hour from 1 October 2004

Development rate for workers aged 18-21 inclusive

£3.80 per hour from 1 October 2003

£4.10 per hour from 1 October 2004

N.B. The development rate can also apply to workers aged 22 and above during their first 6 months in a new job with a new employer and who are receiving accredited training.

A new rate for 16 and 17 year olds

The Government has accepted the Low Pay Commission’s recommendations for a new rate for 16 and 17 years olds (above compulsory school leaving age):-

£3.00 per hour from 1 October 2004

N.B. 16 and 17 year old apprentices will be exempt from the new young workers rate.

Fair Piece Rates

From October 2004, the Government is proposing that employers will have to pay their workers the minimum wage for every hour they work or a fair piece rate initially set at 100% of the minimum wage. The rate will increase to 120% of the minimum wage in April 2005 at which point most homeworkers will receive the minimum wage.

These figures have been taken from the DTI website. For more information please go to: www.dti.gov.uk/er/nmw or the DTI website TIGER (Tailored Interactive Guidance on Employment Rights) at www.tiger.gov.uk

---

Back to Stop Press