Employers are reminded
that new national minimum wage rates (NMW)
will come into force from 1 October. The
new rates are:
- £5.93 an hour to
workers aged 21 and above (the main
rate)
- £4.92 an hour to
workers aged 18-20
- £3.64 an hour to
workers aged below 18 who are no longer
of compulsory school age
Changes to the NMW from 1 October 2010
include a reduction in the age threshold
for the main rate from 22 to 21.
For the first time, a NMW rate also
applies to apprentices. Apprentices under
the age of 19 or apprentices over the age
of 19 in the first year of their
apprenticeship must be paid at least
£2.50 an hour.
Employers who provide living
accommodation for employees are able to
offset the NMW by £4.61 for each day that
accommodation is provided.
LINKS:
National minimum wage – the basics
- The Low Pay Commission is carrying
out consultation to help it make
recommendations for NMW rates from
October 2011.
The commission is seeking feedback on
questions including how firms are coping
with the minimum wage as the economy
emerges from the recession and how the NMW
affects the competitiveness of small
firms.
LINKS:
Low Pay Commission consultation letter
- From 1 January 2011, employers will
need to ensure that they pay workers the
NMW in addition to payments for travel
to a temporary workplace.
The move follows consultation earlier
in the year and is designed to prevent
what the government describes as
“potentially exploitative arrangements”
affecting some temporary workers paid at
or near NMW.
Many temporary workers take part in
travel and subsistence schemes operated by
certain types of business that take
advantage of tax relief on travel from
home to a temporary workplace, by agreeing
that some of the pay that would be subject
to tax and national insurance
contributions (NIC) is replaced with
expenses payments, which provide tax and
NIC savings.
In its consultation paper, the
government says that such arrangements can
adversely affect NMW workers access
earnings-related contributory benefits and
that travel and subsistence schemes seen
by HM Revenue & Customs leave them only
slightly better off in terms of take home
pay. It also says that in some schemes, it
is the business employing the workers who
enjoy the greatest financial benefit.
LINKS:
Travel and subsistence expenses
consultation
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