The Government has set out its annual minimum wage remit to the independent Low Pay Commission (LPC).

It has asked the LPC to conduct its annual review of different National Minimum Wage (NMW) rates and make recommendations on the levels it believes should apply from October 2015. Alongside this request, the Government has asked the LPC to make recommendations on two new areas this year. Firstly, to focus on how minimum wage rates for apprentices can be simplified. At the moment the rate an apprentice is paid is dependent on their age and how long they have been on their apprenticeship. The current system can be difficult for employers to understand, leading to poor compliance. The new remit will look at streamlining the apprenticeships rate so that apprentices get the minimum wage they are entitled to.

Secondly, last September, Business Secretary Vince Cable asked the LPC to consider the wider economic impacts of faster rises which would restore the real value of the minimum wage. The Government has once again asked the LPC to assess whether we can see above inflation increases in minimum wage rates without harming employment, when it makes its recommendations for the 2015 rates. Business Secretary Vince Cable said: “The National Minimum Wage provides vital protection for low paid workers and a real incentive to work. From this October, low-paid workers will enjoy the biggest cash increase in their take home pay since 2008. As the economy continues to strengthen, I want more workers to share the benefits of the recovery.

“This is why I am asking the LPC to once again look at whether the economy is strong enough to support above inflation rises, helping those on low pay get a fairer deal. In addition, I want to see apprentices paid the right wage, so I am asking the LPC to simplify the system to make it easier for employers to know exactly what wage they must pay.” The LPC will report to the Prime Minister, the Deputy Prime Minister and the Secretary of State for Business, Innovation and Skills in February 2015.