The government has today (18 June 2014) set out its annual minimum wage remit to the independent Low Pay Commission (LPC).
It has asked the LPC to conduct its annual review of different National Minimum Wage (NMW) rates and make recommendations on the levels it believes should apply from October 2015.
Alongside this request, the government has asked the LPC to make recommendations on 2 new areas this year (2014).
Firstly, to focus on how minimum wage rates for apprentices can be simplified. At the moment the rate an apprentice is paid is dependent on their age and how long they have been on their apprenticeship. The current system can be difficult for employers to understand, leading to poor compliance. The new remit will look at streamlining the apprenticeships rate so that apprentices get the minimum wage they are entitled to.
Secondly, last September 2013, Business Secretary Vince Cable asked the LPC to consider the wider economic impacts of faster rises which would restore the real value of the minimum wage. The government has once again asked the LPC to assess whether we can see above inflation increases in minimum wage rates without harming employment, when it makes its recommendations for the 2015 rates.
Business Secretary Vince Cable said:
The National Minimum Wage provides vital protection for low paid workers and a real incentive to work. From this October 2014, low-paid workers will enjoy the biggest cash increase in their take home pay since 2008. As the economy continues to strengthen, I want more workers to share the benefits of the recovery.
This is why I am asking the LPC to once again look at whether the economy is strong enough to support above inflation rises, helping those on low pay get a fairer deal.
In addition, I want to see apprentices paid the right wage, so I am asking the LPC to simplify the system to make it easier for employers to know exactly what wage they must pay.
The LPC will report to the Prime Minister, the Deputy Prime Minister and the Secretary of State for Business, Innovation and Skills in February 2015.
Notes to editors:
- The Low Pay Commission was established following the National Minimum Wage Act 1998 to advise the government about the National Minimum Wage. Commissioners have backgrounds in business, trades unions and academic labour relations. For more details, and copies of the full 2014 Report, see the Low Pay Commission website.
- A written ministerial statement has been made today, publishing the remit for the LPC’s 2015 report. Full details can be found at 2015 national minimum wage remit to the Low Pay Commission of the remit will shortly be available at www.gov.uk
- In making recommendations in these areas, government is asking the Low Pay Commission to take account of the state of the economy, employment and unemployment levels, and relevant policy changes.
- When the minimum wage was launched in 1999, the main rate was £3.60. It is now set at £6.31 per hour. The government has that announced the following rates will come into effect on 1 October 2014:
- a 19p (3%) increase in the adult rate (from £6.31 to £6.50 per hour)
- a 10p (2%) increase in the rate for 18-20 year olds (from £5.03 to £5.13 per hour)
- a 7p (2%) increase in the rate for 16-17 year olds (from £3.72 to £3.79 per hour)
- a 5p (2% increase in the rate for apprentices (from £2.68 to £2.73 per hour).
- The Pay and Work Rights helpline number is 0800 917 2368. As well as receiving and investigating complaints about non-payment of the minimum wage, the helpline offers advice and information.