Increased wage costs from 1st October 2010

New national minimum wage rates will be coming into force in October.

There is a new rule for 21-year-olds. Previously, employees would have to be aged 22 to become eligible for the top hourly minimum wage adult rate, but as from October 1, this applies to 21 year olds.

The new rates will be: £5.93 per hour for low paid workers aged 21 and over, an increase of £0.13 per hour from £5.80; £4.92 per hour for 18-20 year olds, up from £4.83; and £3.64 per hour for 16-17 year olds, increasing from £3.57.

There will be an new apprentice minimum wage introduced of £2.50 per hour. The new rate will applies to apprentices who are under 19 or those that are aged 19 and over but in the first year of their apprenticeship.

Estimates are that the cost to employers will be £48 million and it is thought that the change will affect 85,000 extra workers lifted into the adult wage bracket.

This move to reduce qualification for the adult minimum wage to 21 will push up business costs.