In March 2016, the Government accepted the Low Pay Commissions recommendation for the rates of minimum wage which affect workers under 25 and apprentices to increase from 1st October 2016.

So what are the changes?

  • 21-24 year olds will see an increase in national minimum wage by 3.7% to £6.95 an hour
  • The Youth Development Rate, which affects 18-20 year olds, will increase by 4.7% to £5.55 per hour
  • 16-17 year olds will receive £4.00 per hour, an increase of 3.4%
  • There will be a 3% increase for the Apprentice Rate, to £3.40 per hour

 

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Those who are aged 25 and over have already seen the introduction of the National Living Wage; taking their hourly minimum rate to £7.20 which was bought in from April 1st 2016.

Due to the introduction of the NLW for the over 25s, the 21-24 age range has effectively become a new band within the minimum wage. The previous adult rate – which was applicable to workers over 21 – will now affect these workers.

How does this affect contractors?

As we’ve recently mentioned on our blog, the industry has seen a growth in ‘millennials’ entering the world of contracting. Therefore it is important that recruiters and employers are aware of these changes and amend pay rates accordingly from 1st October to ensure that all contractors who are aged 21-24 are paid at least national minimum wage. If you would like to find out more information then please get in touch with the team at Cloud9 Umbrella.