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Imminent rise in the minimum wage

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Employers are being reminded that 1 October sees increases in the hourly rates for the national minimum wage.

The rate for workers aged 22 or over rises to £5.80 an hour; for workers aged 18 to 21 it rises to £4.83 an hour; and for workers aged below 18 who are no longer of compulsory school age it rises to £3.57 an hour.

The daily accommodation offset, which is the amount per day that an employer may offset from the minimum wage when providing a worker with living accommodation, is to be £4.51.

There are changes, too, to the way that the minimum wage and tips and service charges are managed.

From 1 October, employers are not allowed to count service charges, cover charges, tips and gratuities paid to workers through the payroll as part of the minimum wage. Tips given directly to a worker by a customer and tronc payments paid directly to a worker from the tronc master will continue not to be included as part of the minimum wage.

Also from 1 October, the redundancy payment rules are amended.

The limit on a week’s pay for the purposes of working out statutory redundancy payments increases from £350 to £380. The rise also affects employment tribunal awards calculated on the basis of a week’s pay.

The limit usually changes on 1 February in line with the retail price rate of inflation. Given that the change takes place in October, there will be no change on 1 February 2010.