National Minimum Wage

Minimum wage increases to £4.10

THE minimum wage is to increase by more than 10% to £4.10 an hour later this year, the Government announced today.
The rate, covering adult workers, will rise by a further 10p to 4.20p an hour from October 2002 although this will depend on the economic conditions which prevail at the time.   Decisions about the youth rate paid to workers aged between 18 and 21 will be taken in May, after the expected General Election.

Trade and Industry Secretary Stephen Byers said up to 1.5 million people will benefit from the increase.
The minister also hit back at employers' groups which have warned that a 10% rise would lead to job losses.
Mr Byers said he was confident the increased hourly rate would not have an adverse effect on the economy or on employment. The increase to £4.10p an hour represents a 10.8% rise over the present £3.70p.
Mr Byers said the Government had decided to accept recommendations from the Low Pay Commission which said today that the minimum wage should continue to be updated regularly.   The Trade Secretary said more than 70% of workers benefiting from the minimum wage were women.  He described the increase to £4.10p an hour to "significant" and said it should make a "real difference" to workers while being prudent enough to avoid any adverse effect on employment.

Mr Byers said the minimum wage, introduced in April 1999 was one of the Government's "greatest achievements" and had been introduced without costing jobs or hitting productivity.  "In recommending a new rate the Commission had to satisfy itself about the likely impact of any increase.  A rate that was not manageable would hurt the prospects of the very people it was meant to benefit.  The Commission is confident that there is scope for a significant increase in the rate."

Mr Byers said workers on a 40 hour week who are paid the minimum wage will see their earnings increase by £16 a week.  Someone working 25 hours a week will have a rise of £10.  Mr Byers said the Government had accepted in principle that the minimum wage should increase again to £4.20 an hour, in October next year but said this remained subject to the economic conditions which prevail at the time.

The Commission said in a report to the Government that the estimated wage bill impact of the increase will be "modest", adding between 0.1% and 0.3% to the country's total wage bill.  The minimum wage had also had "no discernible impact" on inflation, which will rise by an estimated 0.07% as a result of the £4.10p an hour minimum wage.  The new minimum wage rate will apply to part-time and full time workers as well as to agency staff and people working from home.
Mr Byers said the minimum wage will apply to workers in every size of organisation.

Professor George Bain, chairman of the Commission, said he was delighted that the Government had accepted the recommendations, which had been made after extensive consultation with both sides of industry.

The Department of Trade an Industry states:
The National Minimum Wage must be paid to workers who work at home as well as to those who work at their employers premises or elsewhere away from home. Homeworkers must receive at least the National Minimum wage even if they pass some of the work to others such as close family or friends.
As with all other self-employed workers, homeworkers who are genuinely self employed are not entitled to the national minimum wage.

"I get paid at piecework rate, how will the NMW affect me?"
Pieceworkers are paid by the number of things they produce rather than the number of hours they work. Some pieceworkers work at home. Other pieceworkers work in factories. Pieceworkers must be paid at least the NMW.

National Minimum Wage rates (Source: Department of Trade and Industry)
If you are age 22 or more the rate is £3:70 per hour (except when doing accredited training)
If you are aged 22 or more and doing accredited training the wage is £3:30 per hour. This rate only applies for six months after starting a new job with a new employer and only if the worker is receiving accredited training.
If aged 18 - 21 the rate is £3:00 per hour

How to keep yourself safe
You and your employer should agree beforehand on how many hours you are expected to work and the wage that you are to be paid. It is advisable for you to keep a record of how many hours you work a week and to have a copy of the record signed by your employer.
Your employer must also keep records, including records of how much you have been paid. If you have reason to believe that you haven't been paid enough, you have the right to see these records and take copies of them. It is  a good idea to take someone with you to do this, and you must give your employer notice in writing first.
The law says you cannot be sacked or made to suffer in any other way because you enforce your right to the National Minimum Wage. 

Working Environment
If you are going to work from home, you must ensure that your home is set up properly for the type of work you are aiming to do;  you need a quiet room, with enough space to store any equipment you need and any raw-materials or stock, etc. that you will have to keep.  You need to ensure that you take all the relevant health-and-safety precautions to ensure that you do not put yourself or others at risk due to your work - for instance harmful chemicals or dangerous tools must be stored and used safely, and, if you use equipment, such as a sewing-machine or computer, you must make sure that you set up your workstation 'ergonomically' in order to prevent injury, such as 'Repetative Strain Injury' (RSI).