The National Minimum Wage will rise again in October 2013 when both the adult and apprenticeship rates will increase.
The Government accepted the Low Pay Commission's (LPC) recommendations for increasing the adult and youth National Minimum Wage (NMW) rates. However, in respect of the apprentice rate the Government rejected the LPC's suggestion that this should be frozen and has instead decided to increase it.
The apprenticeship rate applies to apprentices under 19 or over 19 and in the first year of their apprenticeship.
From 1 October 2013:
- the adult rate (21 year olds and over) will increase by 12p to £6.31 an hour
- the rate for 18-20 year olds will increase by 5p to £5.03 an hour
- the rate for 16-17 year olds will increase by 4p to £3.72 an hour
- the apprenticeship rate will increase by 3p to £2.68 an hour
- the accommodation offset increases from the current £4.82 to £4.91.
The independent LPC was established to advise the Government on the NMW. It is made up of representatives from all sides of industry and makes recommendations to the Government each year. In particular, it seeks to balance wages of low paid workers against employment market prospects if the rates were to be set too high.
In announcing the new payment rates, Business Secretary Vince Cable signaled the Government's intention to tackle non-compliance with the NMW. He said there was "worrying evidence that a significant number of employers are not paying apprentices the relevant minimum wage rate."
He confirmed that the Government is "working on a series of tough new measures to ensure we tackle non-compliance issues across the board."
All employers, but particularly those in lower paid sectors such as hospitality, leisure and social care and those which traditionally take on apprentices such as manufacturing need to review existing pay arrangements to make sure that they will still be compliant when the new NMW rates come into force on 1 October 2013.