1 Oct

Minimum wage boost for workers

Minimum wage boost for workers

More than a million workers will see their pay rise from today, as this year's minimum wage increase comes into force.

In addition up to six million workers will also benefit from an increase in the amount of annual paid leave that UK staff are legally entitled to, the government has said.

The adult rate for the statutory minimum wage will rise from £5.35 to £5.52 an hour and from £4.44 to £4.60 an hour for 18 to 21-year-olds.

For 16 and 17-year-olds the minimum wage will increase from £3.30 to £3.40 an hour.

Meanwhile all full-time workers in the UK will be entitled to at least 24 days paid holiday a year, up from the 20 days previously granted. The level of annual leave entitlement is also set to increase again in April 2009 – to 28 days a year.

Employment relations minister Pat McFadden claimed that businesses would benefit from a more motivated and productive workforce as a result of the changes.

"These changes will improve the lives of millions of British workers, giving them more time with their families and ensuring our lowest paid workers continue to be able to earn a living wage," he stressed.

Last week the Trades Union Congress (TUC) also welcomed the minimum wage increase as a "much-needed boost to the pay packets of millions of low paid workers".

"Unions would have liked a bigger increase, but at this level there is nothing for businesses to complain about. The UK economy can easily afford a larger minimum wage increase next year," said TUC general secretary Brendan Barber.

However new research published today by the British Retail Consortium (BRC) claims that last year's minimum wage increase cost retailers £1.7 billion, 13 per cent more than expected.

In addition to financing the higher rates of basic pay, the BRC says that some £200 million of the total cost was due to retailers having to find extra money to maintain pay differentials among staff as a result of the rise.

BRC director general Kevin Hawkins said: "Past minimum wage increases have appeared to emerge from an attempt to balance competing bids from business and unions rather than being genuinely based on economics.

"Future increases should be guided much more closely by increases in median earnings in sectors, including retail, which are most affected by the minimum wage," he added.ADNFCR-1222-ID-18299183-ADNFCR

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