Minimum Wage Increase
From 1st October 2013 the National Minimum Wage (NMW) increases by 12p an hour to £6.31 for adults over 21 years old.
This increase is in response to recommendations by the independent Low Pay Commission, an organisation made up of representatives from all sides of industry.
The Minister responsible, Dr Vince Cable, noted that there is “worrying evidence that a significant number of employers are not paying apprentices the relevant minimum wage rate.” The NMW for apprentices has also increased from 1st October by 3p to £2.68 per hour. Dr Cable added, “We are working on a series of tough new measures to ensure we tackle non-compliance issues.” The government will, therefore, be working with employers, apprentices and training providers to improve awareness of rights and responsibilities on pay. A recent survey by the Recruitment & Employment Confederation (REC) found, however, that 71 per cent of the employers who responded did not offer apprenticeships.
It should be remembered that work experience, as part of an education course and pre-employment provision is exempt under the NMW regulations. Others exempt from the regulations on Minimum Wages are the Self-Employed and Company Directors, though it would be difficult to imagine either category being guilty of deliberately underpaying themselves.
Minimum Wage Vs Geographical Location
One bone of contention with regard to the National Minimum Wage is that it takes no consideration of geographic location. A basic wage of £252.40 per week, before tax, for a 40 hour week could barely sustain somebody working in one of the more affluent regions of the UK, whereas workers in other areas may find it more manageable. The Living Wage Foundation considers that the minimum living wage is actually £8.55 an hour in the London area and £7.45 per hour for those outside the Capital. This translates to £342 and £298 per week.
Recent research by One Society has calculated that, if the NMW had risen in line with the pay of FTSE 100 Directors, the current minimum hourly pay would now be £19.
Matthew Whittaker, senior economist at the Resolution Foundation, observed;
“Jobs growth is welcome news and hailed by many as a sign of economic recovery.
“But this may conceal a worrying scenario in which a two-tier workforce becomes an established feature on the landscape.”
Steve Brame is London Regional Manager at Anne Jagger Recruitment
This article can be found at www.annejagger.com/blog
