Government sets out 2015 minimum wage remit to Low Pay Commission
18 Jun 2014 04:36 PM
Government sets out its
annual minimum wage remit to the independent Low Pay Commission
(LPC).
The government yesterday (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 theLPC 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.