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Minimum wage extended


Payroll service providers should be prepared to amend their practices to ensure that 21 year olds are paid the full adult minimum wage, as the government has announced the qualification age is to drop from 22 years of age this Autumn.

People Management Magazine reports that from the first of October, workers will no longer have to be 22 to qualify for the highest rate of minimum wage pay. The change in the required age will be accompanied by a slight increase in the National Minimum Wage (NMW) rate for those 21 and above, from £5.80 per hour to £5.93 per hour.

As a result of the change in age eligibility the Department for Business Innovation and Skills estimates that over 80,000 younger workers will be moved into the adult wage bracket. However this will see the annual labour bill for British businesses rise by some £48 million according to official estimates, as well as less significant costs in changing payroll administration arrangements.

The changes to the NMW requirements and rates will also affect those under 21. Workers between 18 and 20 will have their pay boosted by 10p to £4.92, whilst hourly pay of under-18's will rise from £3.57 to £3.64. For the first time, those under 18 will be given a mandatory wage of £2.50 per hour which will also apply to those in the first year of an apprenticeship scheme.