New Minimum Wage Rules…

New Minimum Wage Rules…

As from 1 October 2010, employees will no longer have to be aged 22 to become eligible for the top hourly minimum wage rate. The new adult rate will be �5.93, up from �5.80 per hour, and will include employees aged 21 or over. For workers aged between 18 and 20, the new rate will be �4.92, up from �4.83; for those aged under 18, the rate will rise from �3.57 to �3.64 an hour.

For the first time apprentices aged under 19, or those in the first year of their training, will be entitled to a minimum wage rate of �2.50 per hour. The move to reduce qualification for the adult minimum wage to 21 will push up business costs.

The Business Department has estimated that the cost to employers will be �48 million. It is thought that the change will see some 85,000 extra workers lifted into the adult wage category. There is also a change to the rules governing tips and service charges and the minimum wage.

As from 1 October, it is against the law for tips to be used to bring an employee's earnings up to the minimum wage. The old rules meant that tips and gratuities that were given directly to workers by customers and were retained by the workers without any other party being involved could not count towards the minimum wage.

But where service charges, tips, gratuities and cover charges were paid by the employer to the worker via the payroll, then the tip could count towards national minimum wage pay. The new regulations, however, have outlawed this. Now no tips, service charges, gratuities or cover charges can be used to pay the national minimum wage.

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