Apprentices & The National Minimum Wage

The new government announced that there would be changes to the National Minimum Wage that will take effct from 1 October this year.

At the moment, the National Minimum Wage for adults aged 22 years and over is £5.80 per hour. There are development rates for 18 to 21 year olds of £4.83 per hour and for 16-17 year olds of £3.57 per hour. These amounts will increase from 1st October 2010 and in addition, the National Minimum Wage will apply to workers from the age of 21, so the new weekly rates will be £5.93 for workers aged 21 and over, £4.92 for those aged between 18 and 20 and £3.64 for 16 to 17 year olds.  however there are a few workers for whom these rates do not apply.

Under current legislation, apprentices under the age of 19 are not entitled to the development rate under the National Minimum Wage scheme and apprentices aged between 19 and 25 are not entitled to the minimum wage in the first year of their contract.  From 1 October this legislation will change.  Those apprentices aged under 19 will be entitled to a minimum hourly rate of £2.50 and apprentices aged 19 or over will be entitled to £2.50 per hour in their first 12 months of the apprenticeship.

Apprentices as far as the minimum wage is concerned are either workers who have contracts of apprenticeship; or workers who are taking part in the specific training programmes which are funded by a local development agency. You must ensure you have a written agreement between you and your new worker which confirms they are employed an apprentice contract.

For further information about the National Minimum Wage, you can contact the national helpline on 0800 917 2368, or for impartial advice, speak to your local TaxAssist accountant.

Date published 5 Dec 2012

This article is intended to inform rather than advise and is based on legislation and practice at the time. Taxpayer’s circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this article, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.