National minimum wage review under way

The government has set out its remit for the annual review of the national minimum wage (NMW) by the independent Low Pay Commission (LPC).

Alongside the review of the NMW, which will lead to recommendations on the levels the commission believes should apply from October 2015, the government has asked it to make recommendations on two new issues.

One area is how minimum wage rates for apprentices can be simplified. At the moment the rate an apprentice is paid depends on their age and how long they have been on their apprenticeship, a system that the government says can be difficult for employers to understand, leading to poor compliance.

The commission has also been asked whether above inflation increases in minimum wage rates can be introduced without harming employment, when it makes its recommendations for the 2015 rates.

Business Secretary Vince Cable said on 18 June: “From this October 2014, low-paid workers will enjoy the biggest cash increase in their take home pay since 2008. As the economy continues to strengthen, I want more workers to share the benefits of the recovery.

“This is why I am asking the LPC to once again look at whether the economy is strong enough to support above inflation rises, helping those on low pay get a fairer deal.”

The commission will report in February 2015.

Link: National minimum wage rates 

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