05/08/2024

On 30 July 2024, the UK Government published its Policy Paper National Minimum Wage and National Living Wage: Low Pay Commission remit July 2024 in which it tasks the Low Pay Commission to ‘make work pay.’

The Low Pay Commission is the independent body that advises the Government about the National Living Wage and the National Minimum Wage.

The Government has stated that it is “committed to ensuring that the minimum wage is a genuine living wage which delivers improved living standards for working people right across the United Kingdom.”

Despite increases to the National Minimum Wage, working people face “the brunt of unprecedented cost of living challenge”. The Government’s aim is to protect and boost low earning, whilst maintaining competitiveness and protecting the UK’s economy as a whole.

It therefore recommends a staged transition to a single adult rate and removal of what it calls the ‘discriminatory age bands for adults.’

In the interim, the Government has asked the Commission recommends a National Minimum Wage rate that should apply to 18–20-year-olds from April 2025. It is intended that this will continue to narrow the gap with the National Living Wage, taking steps to in time, achieve the single adult rate.

The Low Pay Commission has been asked to ensure that the rate does not drop below two-thirds of UK median earnings for workers aged 21 and over, a recognised measure of low hourly pay.

This will be of interest to those in or preparing for pay negotiations or budgeting.

The Government has stressed that the pursuit of this ambition must consider the effects on employment of younger workers, incentives for them to remain in training or education and the wider economy.

The Low Pay Commission has been asked to provide a final report in response by the end of October 2024.