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LPC recommends 3% increase in minimum wage

News | National minimum wage | Low pay commission | HR

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The Low Pay Commission (LPC) has recommended a three per cent increase on the national minimum wage (NMW),

The recommendations would mean all workers aged 21 and over would pick up at least £6.70 an hour, which would mark the largest increase in the NMW since 2007.

As well as the planned increase to the adult NMW, the LPC has advised a 3.3 per cent rise to £5.30 in the youth development rate for 18-20 year olds, with people between 16 and 17 seeing a rise of 2.2 per cent to £3.87 and apprentices gaining 2.6 per cent increase to £2.80.

Dr Adam Marshall, executive director of policy and external affairs at the British Chambers of Commerce, said: “A three per cent rise will be a welcome boost to many staff, and comes at a time when firms are healthier, more confident and more able to afford an above-inflation rise.”

However, the LPC has warned against sharp rises in the NMW would endanger jobs and place pressure on low-paying sectors and small businesses. 

LPC chair David Norgrove said: “We do believe, however, that the continued [economic] recovery, and in particular the impressive growth in employment of the low paid, should this year allow a further increase in the real and relative value of the minimum wage.”

LPC figures show that, in April 2014, 208,000 workers aged 21 and over were paid lower than the NMW. Some businesses even pay below the NMW, particularly where the accommodation offset is applied. However, there are some sectors where there is a level of high non-compliance across managers.

Business minister, Jo Swinson, said: “Paying less than the minimum wage is illegal, immoral and completely unacceptable. 

“Naming and shaming gives a clear warning to employers who ignore the rules that they will face reputational consequences as well as financial penalties of up to £20,000 if they don’t pay the minimum wage.”

Ms Swanson explained that the government is working hard in areas where particular problems are evident to ensure businesses are paid properly for their work and commitment.


Posted by Jon Aspinell on 27th February 2015

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