The Government has accepted the Low Pay Commission’s (LPC) minimum wage recommendations for rates affecting apprentices and workers aged under 25. These rates will apply from 1st October 2016. The recommendations include:
- the effective new minimum wage for 21 to 24 year olds should increase by 3.7% to £6.95 an hour;
- an increase in the Youth Development Rate, affecting 18 to 20 year olds of 4.7% to £5.55 an hour;
- an increase in the 16 to 17 Year Old Rate of 3.4% to £4.00 an hour;
- an increase in the Apprentice Rate of 3% to £3.40 an hour.
From the 1 April 2016 the Government will introduce the National Living Wage at £7.20 for those aged 25 and over. However, there will be further recommendations made by the LPC later this year about the rate of the National Living Wage from April 2017.
Andy Brookes, Partner and Head of the Hazlewoods Health and Care team has said, “This new pay rate for 21 to 24 year olds marks an important change in the workplace. The changes have the potential to affect the employability of workers under 25 and business will be facing higher pay costs."