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Following on from recommendations made by the Low Pay Commission (LPC) in March 2015, the National Minimum Wage will increase from today – 1 October 2015.

It has been suggested that the increases imposed will have a positive effect on 1.4 milpon of the lowest paid employees in Britain today. Although an additional cost to employers, this should benefit the economy as a whole.

The government announced a 20p increase in the adult rate (from £6.50 to £6.70 per hour); a 17p increase in the rate for 18 to 20-year-olds (from £5.13 to £5.30 per hour); an 8p increase in the rate for 16 to 17-year-olds (from £3.79 to £3.87 per hour) and a 57p increase in the rate for apprentices (from £2.73 to £3.30 per hour).

However, not all workers qualify for the national minimum wage. It is important to distinguish the difference between apprentices and standard employees. An apprentice is an individual aged 16 to 18 (and aged 19 or over who are in their first year of their apprenticeship). Apprentices qualify for the apprentice minimum wage, and not the standard worker minimum wage. All apprentices aged 19 and over and in the second year of their apprenticeship qualify for the standard national minimum wage rates for their age.

Employees who qualify for the minimum wage are workers of school leaving age (aged 16 the last Friday in June of the school year). Those workers can be part-time, casual workers, agency workers, trainees and workers on probation, disabled workers, agricultural workers, foreign workers, seafarers and offshore workers. It is important to note that contracts for payments below the minimum wage are not legally binding. The worker is still entitled to the minimum wage.

Certain individuals do not qualify for the minimum wage. These include self-employed individuals, company directors, volunteer workers, workers on a government employment program, family members of the employer living in the employer's home, workers younger than school leaving age (usually below 16), higher and further education students on a work placement up to one year, workers on government pre-apprentice schemes, members of the armed forces, share fishermen, prisoners, people living and working in a religious community and people working on a Job Centre Plus work trial for 6 weeks.

Holiday days also need to be taken into consideration when employing a worker/apprentice. Apprentices are entitled to a minimum of 20 days of holiday per annum, excluding bank holidays which is the same as standard employees working a 5 day week.

If you require any further information on the national minimum wage increases, employee classification, or holiday entitlements please contact the team at Spirare.