Changes to National Minimum Wage recommendation criteria
The government made changes last week to the remit for the Low Pay Commission (LPC) that will mean it takes the cost of living into account when recommending future minimum wage rates.
The LPC have also been instructed to narrow the gap between the minimum wage rate for 18-20 year olds and the National Living Wage. The longer term objective is to remove the age bands altogether and have a single adult rate.
Each October the LPC makes recommendations to the government on the minimum wage rates to apply from the following April. The new remit keeps this process and timeline in place, allowing for businesses to plan for uplifts.
A range of research and investigations have been requested, with a full report to be made by the LPC by the end of October 2024, so we may well see the impact of this work in the Budget, due on the 30th October.
As well as the cost of living, the LPC’s remit will continue to look at the impact on business, competitiveness, the labour market and the wider economy.
We will of course keep you updated with news around this subject as it becomes available.
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