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Minimum wage changes to ‘cost employers £50m’

 

Plans to include 21-year-olds in the adult rate of the National Minimum Wage (NMW) will cost employers almost £50 million, according to Government estimations.

 

Currently only those aged 22 and over are entitled to the main adult rate of the NMW, although this age restriction is set to fall to 21 from 1 October 2010.

 

In its impact assessment of the changes, the Department for Business predicts that the cost to companies, charities or voluntary bodies of moving 21-year-olds to the adult rate will be around £48.2 million.

 

From 1 October 2010 the adult rate will rise from £5.80 to £5.93 per hour, while the rate for those aged between 18 and 20 will climb from £4.83 to £4.92. 16 and 17-year-olds will be entitled to a minimum hourly rate of £3.64 from this date.

 

In addition, apprentices will become entitled to a minimum wage rate for the first time in October, following the Government's acceptance of recommendations from the Low Pay Commission.

 

The new wage will apply to apprentices who are under the age of 19, or those aged 19 and over who are in the first year of their apprenticeship