Minimum wage to rise by 7p an hour in October

Hospitality operators will have to pay all staff 22 years old and over a minimum of £5.80 an hour from October, after the Government announced a modest rise in the national minimum wage.

The move – a 7p rise on the current level - follows last week’s confirmation that the practice of using tips to make up minimum wage will be outlawed from October.

The rate for 18 to 21-year-olds will increase by 6p to £4.83 and for 16 and 17-year-olds will go up by 4p to £3.57.

The Government also announced that, from October 2010, the adult statutory minimum rate would apply to 21-year-olds.

David Frost, director-general of the British Chambers of Commerce, said: “We pressed for a freeze to the minimum wage because of the severity of the downturn and the daily loss of jobs.

“We are pleased that the increase is only a modest one, and it shows that the Low Pay Commission and the Government have largely understood the seriousness of the situation. However, a freeze would have been more help to business.”

The Government also said that it would draw up plans based on the LPC recommendation that employers who show “wilful disregard for minimum wage laws” should be named and shamed.

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Unions and consumer groups welcome Government decision on tips >>

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By Daniel Thomas

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