From 1 October 2008 the Government have announced that the National Minimum Wage will increase.

The figures will be:

• £5.73 from £5.52 for adults;


• £4.77 from £4.60 for 18 - 21 year old; and


• £3.53 from ££3.40 for 16 - 17 year olds.

During the currrent financial climate this is not welcomed by many employers, however, the Government intends for it to reflect the rising prices of food, energy, water, transport and travel.

This increase comes with a word of warning to employers. The Employment Bill 2007, expected to be in force on 1 October 2008, makes improvements to the regime enforcing the national minimum wage. Furthermore, the Government have announced increased spending to support this.

HMRC has the authority to impose enforcement notices and penalty notices on employers who break the law :

• An enforcement notice requires the employer in question to pay the NMW ;


• Penalty notices are imposed on employers who fail to comply with enforcement notices. A penalty notice imposes a charge of £224.70 per underpaid worker;


• HMRC can also prosecute employers, but this is used as a last resort because the penalty notice system is quicker than taking a case to court.

The Bill proposes that the maximum penalty for breaking the NMW Act be increased from £5,000 to an unlimited fine. In addition, it is proposed that all arrears due to workers should be paid at the current minimum wage rate, which will benefit low paid workers caught up in long-running underpayment cases.

For further advice or assistance regarding the National Minimum Wage, please do not hesitate to contact any member of our Employment team.