Confirmation of pay and compensation changes on 1st October 2009

The National Minimum Wage Regulations 1999 (Amendment) Regulations 2009 were made on 15th July.  They confirm previously announced increases in the NMW from 1st October 2009 and also amend the main regulations to ensure that tips (eg in restaurants) can no longer count towards the minimum wage as was previously sometimes possible.

The main changes are as follows:

• the adult National Minimum Wage (for those aged 22 or more) increases from £5.73 per hour to £5.80;
• for 18-21 year olds the NMW increases from £4.77 to £4.83; and
• for 16-17 year olds the NMW increases from £3.53 to £3.57.

On the same day, 15th July, regulations were made to confirm the proposal announced in the Spring 2009 Budget to increase from £350 to £380 the maximum amount of a week’s pay to be taken into account when calculating statutory redundancy pay and certain employment tribunal awards (the Work and Families (Increase of Maximum Amount) Order 2009).  This also comes into effect from 1st October 2009 and replaces the normal 1st February index linked adjustment for 2010.  It reflects the fact that the RPI in September 2009 (upon which such an increase would normally be calculated) is likely to show a decrease rather than the normal increase.

For agricultural workers DEFRA has announced a new Agricultural Wages Order, also to come into effect from 1 October 2009.  The minimum basic Grade 1 pay rate for farm workers over compulsory school age will increase by 1.2% from £5.74 to £5.81 per hour, whilst the minimum pay rates for Grades 2-6 will increase by 2.2%.  The rates for Apprentices in Year 1 will increase from £3.53 to £3.57 per hour and  in Year 2 from £3.53 to £3.57 for 16-18 year olds, from £4.77 to £4.83 for 19-21 year olds and from £5.73 to £5.80 for those aged 22 and over.

The Scottish Agricultural Wages Board has also proposed minimum wage increases to come into effect for agricultural workers in Scotland (to £5.80 per hour rising to £6.32 after the first 26 weeks employment with the same employer).

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