August 03, 2010
The age at which an employee will become eligible for full National Minimum Wage (NMW) payments will be dropped by 12 months, from 22-years-old to 21.
According to the government’s latest NME Regulations, from October 1st 2010, 21-year-old workers will become fully entitled to the upcoming NMW, which will jump from £5.80 per hour to £5.93 from the same date.
The Department for Business estimates that roughly 85,000 workers will be affected by the move, but admitted that the change in pay structure will cost British businesses an additional £42million in salaries.
Aside from the lowering threshold, workers aged between 18 and 20 will see their hourly rate rise from £4.83 to £4.92; and the rate for those aged under 18 who have ceased to be of compulsory school age rises from £3.57 to £3.64 per hour.
Introduced by the Labour government in 1999, the NMW ensures British workers are protected from unacceptably low levels of pay.
Under additional regulations, introduced for the first time in October, apprentices who are either aged under 19, or who are over 19 and in the first year of their apprenticeship, will now qualify for the NMW. Such apprentices will in future be entitled to a new hourly rate of £2.50.
However, many employers are likely to be caught out by changes in apprenticeship wages, as Kayte Lawton, Research Fellow at the Institute of Policy Research (IPPR) suggests:
"Too many employers don't understand the law when it comes to hiring interns. There is a mistaken belief that employers can take on people on a voluntary basis if both sides agree - but that's not what the law says. If an intern is doing work for a company, then they need to be paid - it's as simple as that.
"In practice, this isn't what happens because employers don't understand the law and enforcement agencies are turning a blind eye. This is a real shame for all those hugely talented young people who can't rely on their parents to fund an unpaid internship. We should be doing much better for these young people."
Whether an intern, apprentice, full time employee or recruiter, NMW will undergo a series of changes in the coming months. If you’re struggling to grasp the changes, expert solicitors are here to help solve any burning issues.
