Increase in The National Minimum Wage and Holiday Entitlement
Two significant changes come into affect on 1 October 2007.
Increase in the National Minimum Wage
The first being the increase in the national minimum wage as detailed below:
• Employees aged 22 and above increase from £5.35 per hour to £5.52 per hour.
• Employees aged between 18 and 21 increase from £4.45 per hour to £4.60 per hour.
• Employees aged 16 to 17 increase from £3.30 per hour to £3.40 per hour.
16 and 17 year old apprentices are exempt from the young workers rate of £3.40.
The minimum wage is calculated using employees gross pay. The following pay elements should be used in the calculation:
• Bonus and commission payments for that pay period
• Tips, gratuities and service charges which are paid through the payroll
• Payments received as part of an incentive
• Piecework
You cannot however use overtime payments in the calculation.
Pay Check will NOT be responsible for automatically updating any employee rates. If you require any changes to rates please send a confirmation email/fax detailing the employees, the revised rates and the effective date.
Holiday Entitlement
The second change is an increase in the statutory holiday entitlement from 20 days a year to 24 days a year for employees who work a five day week (pro rata for part time employees).
The 24 days holiday entitlement can include public and bank holidays. Currently there are 8 public/bank holidays a year. Therefore employees would be entitled to 16 days paid holiday a year on top of the public/bank holidays.
Depending on when your holiday year runs you will need to pro rata the new entitlement from 1 October 2007.
If Pay Check tracks your employees holiday allowance please advise us if any changes are to be made.
From April 2009 the holiday entitlement increases to 28 days a year to include public and bank holidays.
If you would like further information on the minimum wage and holiday entitlement details are available on the following websites or alternatively you can speak to The National Minimum Wage Helpline on 0845 6000 678.
www.dti.gov.uk/employment/holidays
www.berr.gov.uk/employment/pay/national-minimum-wage
www.direct.gov.uk/en/employment/employees/workinghoursandtimeoff
www.acas.org.uk
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