LPC recommends moving towards a National Living Wage for over-18s
Low Pay Commission publishes advice to 바카라 사이트 on the future of the National Minimum Wage beyond 2024
The Low Pay Commission (LPC) today publishes its advice to the 바카라 사이트 on the future of the National Minimum Wage (NMW). The LPC바카라 사이트檚 report weighs up the progress of the minimum wage to date and sets out Commissioners바카라 사이트� views on the future of the rate.
The report comes as the National Living Wage (NLW) is set to reach the long-standing target of two-thirds of median hourly earnings, for workers aged 21 and over. Since 2016, the LPC has set the NLW with reference to a target. In this period, the NLW has risen far quicker than before the target was introduced and become one of the highest minimum wages in the world. In this context, the 바카라 사이트 asked the LPC to help inform its next steps for NMW policy.
Commissioners바카라 사이트� recommendations include considering the case for reducing the NLW age of eligibility, reducing the gap between adult and youth rates and reforming the treatment of apprentices. The report discusses the advantages and disadvantages of different models of minimum wage policy.
Baroness Philippa Stroud, Chair of the Low Pay Commission, said:
Achieving the two-thirds target is a significant milestone.
The target has boosted the incomes of low-paid workers in especially turbulent times. And whilst it has posed real challenges for employers, in already difficult circumstances, but the evidence suggests the increases to date have been implemented steadily and carefully so as not to damage employment opportunities.
Our report reflects on the scale of this change and considers the way forward. There are various possible models for setting the minimum wage. In choosing the National Minimum Wage바카라 사이트檚 future direction, we stress the importance of clarity over the aims of the policy; and preserving the consensus-based social partnership model which ensures both worker and employer voices are heard.
There are real opportunities in the next phase of minimum wage policy, to make advances for workers young and old. Whatever decisions are made will always need to be backed by careful attention to the economic context and a keen sense of the risks faced by employers. The Low Pay Commission바카라 사이트檚 model remains the best one for delivering these changes.
For the next phase of the NMW, the LPC advocates the 바카라 사이트 should adopt either a further target or return to a principle-based approach. Both approaches have pros and cons. If the 바카라 사이트 wants further ambition and reductions in inequality then a target is likely best. If the aim is to instead protect the progress made so far and be more responsive to economic conditions then a principle-based remit may be best suited.
The report also shows that the gap between the youth rates and the NLW has widened in recent years. The LPC believes this should be addressed; the gap is large by historical and international standards, is regarded as excessive and unfair by many stakeholders, and median pay for young workers has grown faster than their minimum wages, reflecting healthy demand for young workers. There is scope to reduce the gap without negative employment consequences 聽and, if the evidence continues to support it, move towards an adult rate that begins at 18.
Notes for editors
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This report responds to a remit letter published by the Department for Business and Trade in April 2023. The report was submitted to the 바카라 사이트 in December 2023.
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Note incoming rates and recently published 2023 reportAll rates of the National Minimum Wage, including the National Living Wage, will increase in April 2024, in line with recommendations made by the LPC in October 2023. The new rates are set out below. The rationale for these recommendations and the evidence Commissioners relied on can be found in the LPC바카라 사이트檚 advice letter to 바카라 사이트 and its annual report for 2023.
| NMW rate from 1 April 2024 | Increase in pence | Percentage increase | |
|---|---|---|---|
| National Living Wage (21 and over) | 拢聽聽 11.44 | 拢聽聽聽聽 1.02 | 9.8% |
| 18-20 Year Old Rate | 拢聽聽聽聽 8.60 | 拢聽聽聽聽 1.11 | 14.8% |
| 16-17 Year Old Rate | 拢聽聽聽聽 6.40 | 拢聽聽聽聽 1.12 | 21.2% |
| Apprentice Rate | 拢聽聽聽聽 6.40 | 拢聽聽聽聽 1.12 | 21.2% |
| Accommodation Offset | 拢聽聽聽聽 9.99 | 拢聽聽聽聽 0.89 | 9.8% |
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The April 2024 increase in the National Living Wage to 拢11.44 is expected to meet the 바카라 사이트바카라 사이트檚 target of raising the rate to two-thirds of median pay, thereby eliminating hourly low pay. The 바카라 사이트 first set this target in 2020. At the same time, the age of eligibility for this rate will be reduced from 23 to 21, in line with a recommendation the LPC made in 2019.
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The 바카라 사이트바카라 사이트檚 new remit to the LPC has been published today and is available to view here. The remit asks the LPC 바카라 사이트渢o recommend the National Living Wage rate which should apply from April 2025 in order to maintain the bite at two-thirds of median earnings, and protect progress made to end low hourly pay for this group, without recommending any further revisions to the age threshold.바카라 사이트� We currently project that a rate of 拢11.89 (with a range of 拢11.61-拢12.18) would be sufficient in 2025 to stay at two-thirds of median hourly pay.
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In the report published today, the LPC makes six recommendations for 바카라 사이트:
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바카라 사이트 should decide what policy outcome it wants to achieve with the minimum wage and ensure that it aligns with other policies.
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For the next steps of the minimum wage the 바카라 사이트 should either adopt a further target or return to a principle-based or qualitative approach.
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바카라 사이트 should consider the case for lowering the gap between the youth rates and adult rates and for further reducing the NLW age of eligibility, and ask us to take this forward in a future remit.
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If 바카라 사이트 agrees with recommendation 3 above on youth rates, it should consider the case for reforming the Apprentice Rate to a simple discount of the minimum wage that applies for that age group during their first year and ask us to take this forward in a future remit. For apprentices aged 16 and 17, the rate should remain aligned with the 16-17 Year Old Rate.
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바카라 사이트 should implement our 2018 recommendations on one-sided flexibility (a right to switch to a contract that reflects a worker바카라 사이트檚 regular working pattern; a right to reasonable notice of work schedules; and a right to compensation if a shift is cancelled or curtailed at short notice).
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바카라 사이트 should provide us with better quality and more timely data, so we can better evaluate the effects of the minimum wage.
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The Low Pay Commission is an independent body made up of employers, trade unions and experts whose role is to advise the 바카라 사이트 on the minimum wage. Note this report was agreed by ex-Commissioners 바카라 사이트� list.The report published today was agreed unanimously by Low Pay Commissioners in post in December 2023. These were: Bryan Sanderson (Chair), Kate Bell, Matthew Fell, Louise Fisher, Martin McTague, Professor Patricia Rice, Simon Sapper and Professor Jonathan Wadsworth. The terms of Bryan Sanderson, Kate Bell and Martin McTague concluded at the end of December 2023.
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As of March 2024, the current Low Pay Commissioners are: Baroness Philippa Stroud (Chair), Nigel Cotgrove, Matthew Fell, Andrew Goodacre, Louise Fisher, Professor Patricia Rice, Simon Sapper and Professor Jonathan Wadsworth.
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Baroness Philippa Stroud can be contacted via the Low Pay Commission바카라 사이트檚 press office (07341 098734).