Department for Business, Innovation and Skills
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Government Approves New £5.80 Minimum Wage Rate

Government Approves New £5.80 Minimum Wage Rate

DEPARTMENT FOR BUSINESS, ENTERPRISE AND REGULATORY REFORM News Release (2009/155) issued by COI News Distribution Service on 12 May 2009

The government has announced new National Minimum Wage rates to take effect in October.

* Low paid workers aged 22 and over can look forward to an increase from £5.73 to £5.80 an hour.
* The rate for 18 to 21-year-olds will also rise from £4.77 to £4.83.
* For 16 and 17-year-olds, the rate will go up to £3.57 an hour from £3.53.

Nearly one million people will benefit from October's increase after the government approved recommendations from the independent Low Pay Commission.

Business Secretary Lord Mandelson said:

"The National Minimum Wage has been in place for 10 years and remains one of the most important rights for workers introduced in that time.

"I am very proud of the difference it has made to the lives of the UK's lowest-paid workers. It protects them from exploitation and also creates a level playing field for business, making a huge contribution to the UK's economic success.

"The Low Pay Commission has carefully examined the latest economic data before making their recommendations on the minimum wage rate, balancing the needs of workers and businesses in the current economic climate.

"The government agrees with this assessment and has accepted the recommendations for these new rates to take effect in October."

The deadline for submission of the Low Pay Commission's (LPC) recommendations to government was extended from February to Friday 1 May to allow Commissioners to take into account the latest possible economic evidence.

As well as the rate changes to take effect this year, the government has accepted an LPC recommendation that the adult rate of the minimum wage should be extended to 21-year-olds. This will be implemented from October 2010.

The LPC also recommended that information should be available on employers who have shown wilful disregard for minimum wage laws. The government has today committed to develop proposals and consider the practical issues involved.

Chairman of the LPC George Bain said: "These are very challenging times for the UK and unprecedented economic circumstances for the minimum wage. We believe that the Low Pay Commission's recommendations are appropriate for this economic climate. They reflect the need to protect low-paid workers' jobs as well as their earnings.

"This was a difficult year for the Commission but our evidence-based approach led to another unanimous Report. I am delighted that the Government has again accepted our recommendations on the rates this year."


Notes to Editors

1. The Low Pay Commission was established following the National Minimum Wage Act 1998 to advise the Government about the National Minimum Wage. Its commissioners include representatives from business groups, trades unions and academics. For more details, and copies of the full report, see http://www.lowpay.gov.uk/

2. When the minimum wage was launched, the main rate was £3.60.

3. The LPC makes recommendations to the government in its annual report. This year, the Government has accepted the recommendations that it:

* Ensures the commissioning policies of local authorities and the NHS reflect the actual costs of care, including National Minimum Wage.

* Implement a policy of transparency on investigations of cases of non-payment.

* Give urgent consideration to identify measures to address the non-payment of the National Minimum Wage in the informal economy.

4. The accommodation offset will rise from £4.46 per day to £4.51.

5. The government will consider the LPC's recommendation on introducing a minimum wage for apprentices and respond in full this summer when it sets the LPC's remit for 2010.

6. The confidential National Minimum Wage helpline number is 0845 6000 678. The number for Northern Ireland is 0845 6500 207. As well as receiving and investigating complaints about non-payment of the minimum wage, the helpline offers advice and information in more than 100 languages.

7. The Department for Business estimates that 950,000 to 1 million people stand to benefit from the October 2009 uprating of the National Minimum Wage. The bottom of this range - 950,000 - is based on the Office of National Statistics' Annual Survey of Hours and Earnings (ASHE) 2008 data, and takes account of forecast and actual average earnings growth (excluding bonuses) up to October 2009. The top of the range - one million - reflects the fact that there is more uncertainty this year. Figures are rounded to the nearest 10,000.

8. Table - estimated number of workers that stand to benefit from the October 2009 National Minimum Wage uprating by country and region:


Wales                                54000
      Scotland                             81000
      Northern                             44000 Ireland
      England                              767000
                  North East                                    55000
                  North West                                    109000
                  Yorkshire and Humber     95000
                  East Midlands                                 76000
                  West Midlands                                 107000
                  Easterm                                       88000
                  London                                        74000
                  South East                                    95000
                  South West                                    68000  


The Government also announced last week that minimum wage regulations should be changed so that tips and service charges could no longer be used to make up staff salaries to the minimum legal level. This change will take effect in October this year.

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