HR Industry News

Millions benefit from increase pay and leave entitlements

— 02 October 2007 —

Millions of British workers will benefit from an increase in the National Minimum Wage and additional annual leave entitlements, which came into effect on Monday, 1 October. The National Minimum Wage was introduced on April 1, 1999, and forms part of the Government's overall strategy to establish fairness in the workplace and ensure that all workers receive at least the minimum hourly rates.

Minister of State for Employment Relations, Pat McFadden, says the new pay and leave conditions would benefit the most vulnerable members of the workforce, improve working conditions and helping to boost productivity.

Under the changes:

• The minimum wage will increase from £5.35 to £5.52 an hour for workers aged 22 and over. There will also be increases from £4.45 to £4.60 for 18-21 year olds, and from £3.30 to £3.40 for 16-17 year olds.
• The minimum annual leave entitlement will increase from 20 days to 24 days for full-time workers. A further increase to 28 days will take place on 1 April 2009.

Following a series of investigation in to the hospitality, catering, cleaning, security and caretaking workforces, the government has doubled the budget for investigations and is now pursuing fines of £220 for each worker found to not be being paid the minimum wage. Persistent breaches can lead to fines of up to £5,000.Simon Parsons, Director of Payments, Benefits & Compliance Strategies at Ceridian

McFadden says the changes should improve the lives of millions of British workers, allowing them to have more time with their families and within their communities, and ensuring that the lowest paid workers continue to be able to earn a living wage. He quoted the number of workers who will benefit from the extra annual leave, as close to six million, a figure which includes 3.5 million women and 2.5 million men. Businesses will also benefit from a more motivated and productive workforce.

He says this will be backed up by the tough new minimum wage enforcement regime announced by the Government earlier this month, including increased maximum fines for employers who flout the laws. Employers who do not pay the correct wages will have to repay arrears to their workers at a higher rate. There are now two common commencement dates for changes to the regulations (April 6 and October 1), which makes it easier for businesses to plan ahead and adapt to the new rules.

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