New minimum wage rules will add to business costs

5 August 2010

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

As from 1 October, employees will no longer have to be aged 22 to become eligible for the top hourly minimum wage rate.

The Business Department has estimated that the cost to employers will be £48 million.

The new adult rate will be £5.93, up from £5.80 per hour, and will include employees aged 21 or over.

It is thought that the change will see some 85,000 extra workers lifted into the adult wage category.

For workers aged between 18 and 20, the new October rate will be £4.92, up from £4.83; for those aged under 18, the rate will rise from £3.57 to £3.64 an hour.

For the first time apprentices aged under 19, or those in the first year of their training, will be entitled to a minimum wage rate of £2.50 per hour.