The government has today accepted the independent Low Pay Commission’s (LPC) recommendations for this year’s adult and youth National Minimum Wage (NMW) rates.
However, the government has concluded that the apprentice rate should be increased rather than frozen as recommended by the LPC. The LPC based this recommendation on concerns about level of compliance with the apprentice rate.
The following rates will come into effect on 1 October 2013:
The adult rate will increase by 12p to £6.31 an hour
The rate for 18-20 year olds will increase by 5p to £5.03 an hour
The rate for 16-17 year olds will increase by 4p to £3.72 an hour
The apprentice rate will increase by 3p to £2.68 an hour.
The accommodation offset increases from the current £4.82 to £4.91
Business Secretary Vince Cable said:
“The independent Low Pay Commission plays a crucial role in advising the government when setting the National Minimum Wage every year. It balances wages of low paid workers against employment prospects if the rate was set too high.
“We are accepting its recommendations for the adult and youth National Minimum Wage rate increases, which I am confident strikes this balance. However, there is worrying evidence that a significant number of employers are not paying apprentices the relevant minimum wage rate.
“Apprenticeships are at the heart of our goal to support a stronger economy, and so it is important to continue to make them attractive to young people. Therefore, I am not taking forward the LPC’s recommendation to freeze the apprenticeship rate due to non-compliance, but instead am raising it in line with the youth rates. We are working on a series of tough new measures to ensure we tackle non-compliance issues across the board.”
Chair of the LPC David Norgrove said:
“We welcome publication of our 2013 Report today and the Government’s acceptance of our recommendations on the level of the National Minimum Wage for adults and young people. We also very much welcome the Government’s commitment to tackle non-compliance in the areas highlighted by us.”
The government will be working with employers, apprentices and training providers to improve awareness of rights and responsibilities on pay. Along with this, it will be undertaking focused enforcement work to clamp down on non-compliance by employers of apprentices.
The government supports work experience as a valuable way of helping young people get into work. The law on the NMW is clear. Work experience as part of an education course and pre-employment provision is exempt under the NMW regulations. However, if somebody is a worker under NMW legislation, then they are entitled to the minimum wage.