Millions to get pay rises under government plans to launch a ‘genuine’ living wage
MILLIONS of workers are in line to get a pay rise under fresh plans.
The government has announced plans to introduce a “genuine” living wage and remove age bands for the statutory rate.
It means that those aged 18 and over will be paid the same minimum wage.
At the moment, there are two different minimum rates all workers are supposed to get across the UK – the National Minimum Wage and the National Living Wage.
The National Minimum Wage (NMW) is the minimum pay per hour for workers who have left school.
Right now, 18 to 20-year-olds must earn at least £8.60 an hour.
Meanwhile, the National Living Wage is the minimum wage for those over 21, and is slightly higher.
Everyone over the age of 21 must earn at least £11.44 an hour.
However, these age bands will be removed, in changes promised by Labour in the run-up to the election.
Business and Trade Secretary Jonathan Reynolds said: “For too long working people have faced the worst of the cost-of-living crisis, but this Government is taking bold action to address it and make work pay.
“The new remit to the LPC is the first of many vital steps we will take to support more people to stay in work and improve living standards.
“Our focus remains on putting more money in working people’s pockets and boosting economic growth.”
The LPC has been told to narrow the gap between the minimum wage rate for 18 to 20-year-olds and the National Living Wage, which the government said will be the first step towards achieving a single adult rate.
Chancellor Rachel Reeves said: “Economic growth is our first mission, and we will do everything we can to ensure good jobs for working people. But for too long, too many people are out of work or not earning enough.
“The new LPC remit is an important first step in getting people into work and keeping people in work, essential for growing our economy, rebuilding Britain and making everyone better off.”
The remit of the LPC will continue to consider the impact on business, competitiveness, the labour market and the wider economy, ministers said.
Who gets the National Minimum Wage and am I entitled?
TO qualify for the National Minimum Wage, you have to be of school-leaving age, which is usually above 16.
You are eligible to receive the pay rate if you work full-time, part-time or as a casual labourer.
You are also entitled to the National Minimum Wage if you are an agency worker.
Apprentices also qualify for a National Minimum Wage, as well as trainees and staff still in their probationary period.
The rates also apply to disabled workers.
Those who are self-employed, voluntary workers, company directors, and family members who live in the home of the employer and do household chores do not qualify for the minimum wage.
Au pairs, members of the armed forces, and people on a government employment programme are also not entitled to the payment.
TUC general secretary Paul Nowak said: “These are significant first steps towards making the minimum wage a real living wage and will make a difference to millions.
“We welcome the government’s decision to ask the Low Pay Commission to be more ambitious next year and into the future.
“We also support the government’s commitment to ending discriminatory age bands for minimum wage workers.
“Young people face the same cost-of-living pressures as other adult workers and will welcome their pay being brought into line.”
It comes after Rachel Reeves announced a swathe of reforms to help “restore economic stability” on Monday.
This included scrapping Winter Fuel Payments for those not in receipt of pension credit.
Deputy Prime Minister Angela Rayner also unveiled an overhaul of planning rules in a push to build 1.5 million new homes in five years.
NOT ALL IS CHANGING
The National Minimum Wage for children under 18 will not be raised to the same level as that planned for adults.
This means kids aged 16 and 17 will still have a slightly lower hourly minimum wage requirement.
At the moment, those under 18 are legally required to get £6.40.
Apprentices are paid the same rate too.
Anyone who thinks they are not getting paid fairly should raise the issue with their employer in the first instance.
If this is not effective, the next step is to file a complaint on the government’s website.
You can do this by visiting www.gov.uk/government/publications/pay-and-work-rights-complaints.
Employers who do not pay the minimum wage can be publicly “named and shamed”.
Those who blatantly fail to comply are also at risk of facing criminal prosecution.
What's the Real Living Wage?
Unlike the National Minimum Wage and National Living Wage, the rate is not a legal requirement and is voluntary.
Over 15,000 UK businesses voluntarily pay it because they believe their staff deserve a wage that meets everyday needs.
Those working for employers subscribed to the scheme can expect to earn £12 an hour or £13.15 an hour is they’re based in London.