New National Minimum Wage rates
Release date: Oct 2006

From 1 October 2006, a new National Minimum Wage (NMW) rates will come into force. The NMW applies to nearly all workers and sets hourly rates below which an employer must not allow pay to fall.

For pay reference periods beginning on or after 1 October, employers will have to pay all workers eligible for NMW-level payment as follows:

• £5.35 an hour to adult workers aged 22 and above
• £4.45 an hour to workers aged 18-21 – the development rate
• £3.30 an hour to workers aged below 18 who are no longer of compulsory school age
• £4.15 a day (a total of £29.05 per week as the daily accommodation offset – the amount you can offset from the NMW rate if you provide accommodation for your workers.

Workers eligible for the NMW-level payment include:

• homeworkers
• part-time workers
• casual workers
• agency workers
• people who work on short-term contracts

The Age regulations, which come into force on 1 October, will also affect apprentices and certain workers aged 22 and above. Under these new rules:

• It will no longer be possible to pay the NMW older workers’ development rate to workers aged 22 and above, who are starting a new job with a new employer and are receiving accredited training. Under existing rules, this rate applies for the first six months of a new job.
• There will no longer be an upper age limit on the apprenticeship exemption.

For further information about these or any other employment issues please contact Chris Wiper
chris.wiper@close-thornton.co.uk

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