National Minimum Wage rise comes in for young workers

The National Minimum Wage is set to increase for workers across Britain who are aged 24 and under from this weekend. 

The rise comes after the National Living Wage was introduced for workers aged 25 and over in April this year.

The Government has set out who qualifies for the rise from October 1, including apprentices and part-time workers.

Introduced by the Labour Party in 1998, the National Minimum Wage gives workers and apprentices a guaranteed rate of pay and rises yearly.

Rachel Yorke, an employment lawyer at SAS Daniels, said: “The National Minimum Wage rates change every October.

“Despite the annual NMW increase, it’s still criticised by some who argue the rates are based on what employers can afford and not what individuals need to earn to get by.

“For employers, however, even slight increases in rates can lead to a need to reduce overheads in other areas, which in turn could lead to redundancies and fewer job opportunities.

“There are around 1.5 million on the NMW but we do have one of the lowest unemployment rates in Europe, so it could be argued that we’re striking a good balance at the moment.”

The National Living Wage for the over-25s, was set in April this year and is £7.20 per hour.

Christian Mancier, a partner at Gorvins Solicitors, said: “The National Living Wage was introduced in April 2016 and increased the minimum wage for those aged over 25 from what was then £6.70 to £7.20.

“Given this only applied to those aged 25 and over it is pleasing to see increases applying to those aged under 25.

“However, one important distinction to draw is the difference between the National Living Wage – effectively the Government imposed minimum wage for those aged 25 and over – and the Living Wage promoted by the Living Wage Foundation, which independently sets a voluntary hourly rate which is designed to reflect the ‘real cost of living’.

“The current minimum Living Wage is £8.25 outside of London and applies to all employees aged 18 plus and not those 25 or over as per the National Living Wage.

“Those employers who pay the Living Wage can become accredited Living Wage Employers with organisations locally who have achieved this accreditation, including The Greater Manchester Chamber of Commerce, Stockport Homes, Santander, Nationwide Building Society, Co-operative Bank, Richer Sounds plc and Lloyds Bank.

“Advantages seen by business who are Living Wage Employers include a decrease in absenteeism, enhanced quality of work from employees and increased staff recruitment and retention.”

What is the new minimum wage?

The new rates from October 1, 2016, will be:

3.7% increase in the rate for 21 to 24 year olds from £6.70 to £6.95 per hour

4.7% increase in the rate for 18 to 20 year olds from £5.30 to £5.55

3.4% increase in the rate for 16 to 17 year olds from £3.87 to £4.00

3% increase in the rate for apprentices from £3.30 to £3.40 per hour