National Minimum Wage celebrates 10th birthday

National Minimum Wage

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National Minimum WageBusiness Secretary Lord Mandelson today celebrated a decade of success for the National Minimum Wage and pledged tough government action to support workers’ pay rights.

Now standing at £5.73 for those aged 22 and over, the minimum wage has helped millions of UK workers get an honest day’s pay for an honest day’s work.

Business Secretary Lord Mandelson said:

"The minimum wage has been a huge success for 10 years and is there to help make sure that workers are treated fairly, whatever the economic climate.

"We are determined to protect the rights that everyone in the UK is entitled to – this is a basic matter of fairness and helps ensure a level playing field for business.

"Before it was introduced, there was no limit on how little employees could be paid and I am sure that no-one could now imagine a return to those times.

"Our new penalties mean that anyone caught underpaying their employees faces an automatic penalty – no-one can ignore their responsibilities."

The adult rate of the minimum wage has risen by 59% since its introduction in April 1999 – from £3.60 to the current rate of £5.73. Around one million people benefit each time the rate rises.

Automatic penalties for employers who underpay come into force on 6th April, ensuring that anyone caught flouting the law faces a stiff penalty.

The most serious cases of non-compliance will be able to go to trial in a Crown Court, which will have the power to impose an unlimited penalty.

Sarah Kent, 38, from Nottinghamshire, said the minimum wage had helped her stay in the catering industry as a qualified chef for 12 years, building up her expertise. She is now taking over her own cafe and will be an employer herself.

Sarah said:

"The National Minimum Wage has certainly been a good thing as it puts the onus on the employer not to break the law – and sets a fair standard. Workers should always check their rights in case employers try to get round paying the right hourly rate.

"My own experiences make me appreciate how important a minimum wage is to people."

John Cridland, CBI Deputy Director-General, said:

"For the past decade the minimum wage has been set at a level which has really helped low paid workers without putting their jobs or firms at major risk.

"This approach sets a good foundation for the challenging times ahead as we cope with a worsening recession.

"The government must be tough on the minority of rogue employers who undermine this landmark policy, and we support stiffer penalties for those who underpay their staff."

TUC General Secretary Brendan Barber added:

"The minimum wage has helped raise the living standards of thousands of families across the UK since its introduction in 1999.

"It has been an integral part of making the UK a fairer society and is an important part of protecting some of Britain’s most vulnerable citizens. We must continue to work together to develop the minimum wage, which has a vital part to play in shaping the economy of the future.

"We welcome the new penalties introduced today, which will help to ensure that there is no hiding place for rogue employers underpaying their staff. We are absolutely determined to ensure that every worker can get what they are due."

Today also sees new annual leave rules come into force, raising the statutory entitlement for all UK workers from 24 days to 28 days a year.

A phased approach to extending annual leave rights means businesses have been preparing for today’s change since 2007.

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