New minimum wage comes into effect 1 October 2014

More than one million people in the UK will see a pay increase of as much as £355 a year once the new minimum wage (NMW) is introduced on 1 October 2014.

When Business Secretary Vince Cable accepted in full the independent Low Pay Commission’s (LPC) recommendations for 2014, he stated that the new minimum wage would usher in the first “real terms” cash increase since 2008. The new minimum wage is demarcated into different groups as follows:

  • £2.73: Apprentices under 19 years of age, or older than 19, but in their first year of apprenticeship
  • £3.79: Workers aged 16 to 17 – in other words those who are at school-leaving age, but are not yet 18
  • £5.13: Workers aged 18 to 20
  • £6.50: Workers 21 and over

The new minimums represent a 2–3% increase and apply to anyone who is employed in the UK. This includes pieceworkers, home workers, those working for or through agencies, commission workers and all part-time or casual employees – no matter the region, industry or size of the company.

There are exceptions, however. The NMW does not apply to anyone who is self-employed, volunteers and voluntary workers, or company directors.

Cable said: “The LPC’s new forward guidance gives us a much better understanding of how an economic recovery can be translated into faster and significant increases in the National Minimum Wage for low paid workers, without costing jobs.”

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