New Minimum Wage £6.31 From October 2013

14th April 2013

The national minimum wage is to rise by 12p an hour to £6.31 for adults and by 5p to £5.03 for 18-to-20-year-olds from October, the government has announced.

Business secretary Vince Cable said the government accepted the recommendation of the Low Pay Commission. He said, "Nobody in the country should be paid less than the minimum wage"

However, although the Commission said the rate for apprentices should be frozen, Mr Cable said it would rise by 3p to £2.68 an hour.

LOW PAY COMMISSION’S 2013 REPORT

The Low Pay Commission today welcomed the Government’s acceptance of its recommendations on rates for the National Minimum Wage (NMW) for adults and young people from October 2013.

The Chair of the Low Pay Commission, David Norgrove said: “We have as usual considered all the evidence we have gathered together with assessments of the prospects for the UK economy when making our recommendations this year. Although the economy is forecast to grow through 2013 and 2014, the pace is likely to be low and earnings increases still very restrained. We believe our recommendations for October 2013 balance the needs of low-paid workers against the challenges facing businesses, particularly small businesses.

The position of young people in the labour market appears to have stabilised compared with the continuing deterioration we reported a year ago. It is too early to know if this trend is temporary or will continue, so we have continued to be cautious with regard to our recommendations for young people. We do not want to damage the employment prospects of young people and the lower rise for them than for adults should further increase the relative attractiveness of young people to employers.

We welcome the Government’s commitment to tackle non-compliance in the areas highlighted by us in our report.”


A full list of this year’s recommendations follows.

National Minimum Wage Rates
We recommend that the adult rate of the National Minimum Wage be increased by 1.9 per cent, or 12 pence, to £6.31 an hour, from 1 October 2013.
We recommend an increase of 1 per cent in the Youth Development Rate to £5.03 an hour and in the 16-17 Year Old Rate to £3.72 an hour from 1 October 2013.

We recommend that the Apprentice Rate should remain at £2.65 an hour from 1 October 2013.

Accommodation Offset
We recommend that the accommodation offset should remain the only permitted benefit-in-kind that can count towards payment of the NMW and there should be only one rate. It should apply irrespective of whether the worker has a choice over taking the accommodation.

We recommend that the accommodation offset be increased by 1.9 per cent, to £4.91 a day, from 1 October 2013.

Salaried-hours Workers
We recommend that the regulations for salaried-hours workers continue to be required in all their essentials. In order to make it as simple and easy as possible to achieve NMW compliance the Government should adapt its guidance to include examples and an on-line means of determining what payment is required.

Compliance
We recommend that the Government should combine a communications campaign and a targeted enforcement initiative to ensure that the Apprentice Rate is known to employers and apprentices, and that infringers are caught, punished, and wherever appropriate, named.

We recommend that contracts issued by public bodies which commission the provision of social care should contain a clause requiring at least the NMW to be paid, just as they may require compliance with other aspects of the law, such as health and safety legislation. The Government should take responsibility for bringing this about.