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Minimum Wage

Business, Enterprise and Regulatory Reform written question – answered on 21st January 2008.

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Photo of Michael Meacher Michael Meacher Labour, Oldham West and Royton

To ask the Secretary of State for Business, Enterprise and Regulatory Reform how many persons he estimates are working (a) at below the minimum wage, (b) at the minimum wage, (c) for between £5.53 and £7.00 per hour, (d) for between £7.01 and £8.00 per hour, (e) for between £8.01 and £9.00 per hour, (f) for between £9.01 and £10.00 per hour and (g) for between £10.01 and £12.50 per hour; and what percentage each of these groups are of the total work force.

Photo of Pat McFadden Pat McFadden Minister of State (Department for Business, Enterprise and Regulatory Reform) (Employment Relations and Postal Affairs), Member, Labour Party National Executive Committee

holding answer 26 November 2007

The information requested is as follows.

(a) It is estimated that there are 292,000 jobs which were paying below the applicable NMW rate in April 2007.

Some people may be paid below the NMW due to non-compliance with the legislation. The Government have announced their intention to introduce new penalties for all employers who underpay the national minimum wage and a fairer system of paying arrears. These measures are included in the Employment Bill announced in the Queen's Speech 2007. However, not all those that are paid less than the NMW reflect non-compliance. There are a number of circumstances where the national minimum wage does not apply and so individuals may legitimately earn less than the appropriate national minimum wage rate for their age. For example, individuals may be on Government training programmes or apprenticeships, where they are exempt for the first year, up to the age of 26. Employees may also not be receiving the national minimum wage in cash terms because employers can legitimately reduce rates to take into account the cost of accommodation provided, for which there is a standard level of deduction.

(b) The estimates of those at the NMW level are not available from the Office of National Statistics, as hourly earnings are calculated from weekly earnings divided by the numbers of hours, it is not possible to be so precise. However, the number of jobs less than the NMW plus 5p are 921,000 (3.6 per cent.).

(c) 3,939 jobs (16.5 per cent.)

(d) 2,279 jobs (9.5 per cent.)

(e) 2,062 jobs (8.6 per cent.)

(f) 1,777 jobs (7.4 per cent.)

(g) 3,342 jobs (14.0 per cent.)

The numbers are from the Annual Survey of Hours and Earnings (ASHE). They are indicative as they exclude some employees (such as those whose pay has been affected by loss of earnings or those who are not on adult rates) in order to give a better measure of earnings. Therefore, the proportions are more meaningful than the absolute numbers.

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