U.K.: Minimum Wage Will Include New Premium for ‘More Experienced' Workers

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By Rick Vollmar

July 9—The Department for Business, Innovation & Skills has issued a policy statement on future increases in the national minimum wage (NMW) intended to “encourage a model of higher pay and higher productivity–supporting people who work hard and want to get on in life to fulfil their aspirations.”

To this end, the government intends to introduce a premium over and above the base NMW to reward employees with more experience (i.e., workers 25 years of age and older). The first premium of 50 pence (75 cents) will be effective April 1, 2016, bringing the total NMW to 7.20 pounds ($11.00) as of that date.

The combined base NMW and the premium will represent 55 percent of median earnings, according to government estimates, which the government wants to increase to 60 percent by 2020 for an NMW of 9.00 pounds ($14.00).

To “give more certainty to business,” BIS has requested that the Low Pay Commission, which makes recommendations on NMW levels, provide guidance on both the 2016 and 2017 NMWs in February 2016 and on both the 2017 and 2018 premiums in October 2016.

To contact the reporter on this story: Rick Vollmar at rvollmar@bna.com

The BIS policy statement is available at https://www.gov.uk/government/publications/national-minimum-wage-low-pay-commission-remit-2016.

For more information on British HR law and regulation, see the U.K. primer.