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HMRC internal manual

National Minimum Wage Manual

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HM Revenue & Customs
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Roles and Responsibilities: The Low Pay Commission

Relevant legislation

The legislation that applies to this page is as follows:

  • National Minimum Wage Act 1998, sections 5, 6, 7 and 8, and Schedule 1

General

The Low Pay Commission is an independent statutory public body established under the National Minimum Wage Act 1998 (NMWM01030). It advises the Government about the national minimum wage. Its nine members are appointed by the Secretary of State for Business, Innovation & Skills (NMWM02020). Members are drawn from employer, employee and independent organisations.

The Low Pay Commission was originally set up in 1997 on a non-statutory basis to make recommendations about how the national minimum wage should be introduced. Its statutory position was set out in the 1998 Act, and in June 2001 the Government announced that it would have a permanent monitoring role. Its responsibilities include:

  • Conducting extensive research and consultation
  • Commissioning research projects
  • Analysing relevant data and liaising with the Office of National Statistics to establish better estimates of the incidence of low pay
  • Surveying firms in low paying sectors
  • Consulting with employers, workers and their representatives
  • Taking written and oral evidence from a wide range of organisations
  • Undertaking fact-finding visits throughout the UK
  • Monitoring and evaluating the impact of the national minimum wage
  • Reviewing the different rates and making recommendations for change

The Secretary of State for Business, Innovation & Skills can ask the Low Pay Commission to look at issues relating to the national minimum wage. When making recommendations the Commission must consider the impact on the economy of the United Kingdom, competitiveness and any other factors the Secretary of State asks them to take into account. The Commission reports back to the Secretary of State and the Prime Minister at the same time. The reports are published and laid before both Houses of Parliament. If any recommendations made in a report are not accepted, or are only partly accepted, the Secretary of State must explain why in Parliament.