CIPP survey on National Minimum Wage and National Living Wage
26 August 2015
The Government is making major changes to the National Minimum Wage and has asked the LPC to report to it twice in relation to the new arrangements. The CIPP has created a survey to gather views on the existing rates and on the potential impact of the National Living Wage.
The CIPP has created a survey to collect your views on the proposed tool. The survey should take around 15 minutes to complete and will close on 16 September 2015. Thank you in advance for your time and input.
The remit of the Low Pay Commission (LPC) is to provide advice to the government on matters relating to the National Minimum Wage (NMW). This year the Low Pay Commission has been asked to report twice, firstly by early February 2016 on the future level of the NMW rates and secondly, by October 2016 giving recommendations for the rate of the National Living Wage (NLW) which will come into effect from April 2017.
There are currently four NMW rates which are:
- Adult rate aged 21 and over;
- Youth development rate for those aged 18-20;
- The 16-17 year old rate; and
- Apprentice Rate.
The initial NLW Premium will be 50p and will be payable to workers aged 25 years and above. This will take the total hourly rate payable to £7.20 from April 2016.
The Government has set an ambition that the NLW should continue to increase each April to reach 60% of median earnings by 2020 with the aspiration of a £9 NLW rate by 2020.
In February 2016 the LPC will monitor, evaluate and review levels of NMW rates and report on proposed NMW rates for October 2016. then in October 2016 the LPC will report on proposed NLW rates for April 2017.
Alongside this the Government is undertaking a review of the NMW cycle with the intention to align all changes to NMW - the earliest this could happen, subject to review, is April 2017.
It may be helpful when responding to the following questions to consider that from 1 October 2015 the adult hourly rate of the NMW will be £6.70; the hourly rate for those aged between 18-20 years old will be £5.30; the 16–17 Year old hourly rate will be £3.87 and the Apprentice Rate will be £3.30 per hour. The daily limit of the accommodation offset will be £5.35 (£37.45 a week).
From April 2016 the National Living Wage will be introduced at £7.20 an hour for those aged 25 and over.