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Spotlight on the theory

Explaining the National Minimum Wage

For the most current information on the national minimum wage, visit the Inland Revenue Web site (www.inlandrevenue.gov.uk)

The National Minimum Wage became law on 1 April 1999.

The minimum wage is the minimum amount of pay that workers aged 18 years or older are entitled to.

There are two levels of minimum wage dependent on age:

  • £3.20 per hour for workers aged between 18 and 21 years. (£3.00 per hour up to 01/06/00)
  • £3.70 per hour for workers aged 22 years or older. (£3.60 per hour up to 30/09/00)

There is also an accredited training rate of minimum wage;

  • it is £3.20 per hour, and is for workers aged 22 years and over who start a new job with a new employer and do accredited training.
  • the rate can only be paid for the first six months of the new job, after which the worker must get at least £3.70 an hour.
  • accredited training is a course approved by the UK government to obtain a vocational qualification.

Most adult workers in the United Kingdom must be paid at least the national minimum wage. It does not matter:

  • how you are paid
  • if you are part time or full time
  • if you are a casual worker, a home worker or an agency worker



Question

An increase in the national minimum wage will; (select one answer)
(a) * increase household income because it will increase household wages
(b) * increase household income because it will increase household benefits
(c) * decrease household income because it will decrease household income
(d) * decrease household income because it will decrease household benefits