This month sees the introduction of a number of changes to the National Minimum Wage(NMW) regulations.

Main adult rate to rise

The NMW rates increased with effect from 1 October 2009, following recommendationsby the Low Pay Commission (LPC), which reviews NMW rates on an annual basis on behalfof the Government.

Furthermore, employers who are found to be in breach of the NMW legislation are nowsubject to automatic penalties, ranging from £100 to £5,000. This is in addition
to the wages already owed to the employee. From October 2010, 21-year-olds will be included in the main adult rate of the NMW.

Tips and service charges

In addition, from 1 October 2009 employers will be banned from using tips and service charges to bring the wages of bar and restaurant workers up to the statutory levels.

A recent case in the Court of Appeal concluded that employers must not take into account tips, gratuities, service charges or cover charges when paying the NMW, unless these are paid to employees through the employer’s payroll.

Apprenticeship pay

Meanwhile, the Government has asked the LPC to consider introducing a minimum wage for apprentices. Under the current legislation, apprentices aged 18 years or less are exempt from the NMW, as are those aged 19 or older who are in the first year of their apprenticeship. From August this year Learning and Skills Council apprentices are guaranteed a weekly pay rate of £95.

The LPC has been asked to report its recommendations to the Prime Minister and Secretary of State for Business, Innovation and Skills by the end of February 2010.

For more information on the National Minimum Wage changes, please visit the Hot Topics section of our website
http://www.branstonadams.co.uk/data/topical.