The National Minimum Wage is an important cornerstone of Government strategy aimed at providing employees with decent minimum standards and fairness in the workplace. It applies to nearly all workers and sets hourly rates below which pay must not be allowed to fall. It helps business by ensuring companies will be able to compete on the basis of quality of the goods and services they provide and not on low prices based predominantly on low rates of pay. The rates set are based on the recommendations of the independent Low Pay Commission.
The current rates:
Detail
From 1st October 2006
From 1st Oct 2003
From 1st Oct 2004
Main rate (for adults – anyone 22 or over)
£5.35
£4.50
£4.85
Development rate (aged 18-21)
£4.45
£3.80
£4.10
Young workers' rate
£3.30
Non-existent
£3.00
The National Minimum Wage main rate applies from a worker’s 22nd birthday;
The development rate applies to workers aged 22 years and over who are starting a new job with a new employer, and doing accredited training;
The young workers’ rate applies to 16 and 17 year olds (above compulsory school leaving age).NB: 16 and 17 year old apprentices will be exempt from the new young workers rate;
These new rates apply only to pay reference periods beginning on or after the date they came in to law;
The National Minimum Wage applies throughout the United Kingdom.
The National Minimum Wage does not apply to:
People who are genuinely self-employed;
Volunteers;
People who are under 18;
Apprentices who are over 18 but under 26 in the first 12 months of their apprenticeships;
Members of the armed forces;
People who work and live as part of a family (for example au pairs).
Fair Piece Rates - from October 2004, the Government is proposing that employers will have to pay their workers the National Minimum Wage for every hour they work or a fair piece rate initially set at 100% of the minimum wage.
The rate will increase to 120% of the minimum wage in April 2005 at which point most home-workers will receive the minimum wage.
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