Minimum wage, maximum debate

New National Minimum Wage (NMW) rates took effect from 1 October 2006 and, as is inevitable, this triggered renewed debate about their impact. Both the Forum of Private Business and the CBI are concerned about movements above the rate of increase in earnings and, perhaps in response, the government has asked the Low Pay Commission to consider the impact of the NMW on small business in the future.

The TUC, on the other hand, argues that a rate of £6 by October 2008 should be ‘easily affordable’ and they have called for a compliance crackdown claiming that some industry sectors are ignoring the law.

Ensuring compliance with the NMW is the responsibility of HMRC, which operates 16 teams of compliance officers across the UK. They can inspect employers' records, give advice and secure pay arrears.

Recently they gave examples of excuses used by employers who had not paid the minimum wage. These varied from simple misunderstandings, such as not applying the NMW to an employee over 65, to a claim that the worker ‘doesn’t deserve it’!

The rates are now £5.35 for workers aged 22 and over, £4.45 for those aged 18 to 21 and £3.30 for those aged 16 or 17. Please contact us for further advice if you are unsure about your responsibilities under minimum wage legislation.