Minimum wage now having a major impact says IDS

NATIONAL MINIMUM WAGE

Minimum wage now having a major impact says IDS

The national minimum wage now permeates many more areas of pay determination and is having much more impact than was foreseen, according to research by Incomes Data Services.

Increasingly the minimum wage is setting the pay agenda for an ever-wider range of employers and employees. And it is changing employers' approaches to pay and affecting the timing of pay reviews.

Alastair Hatchett, head of pay services at IDS, said: "The increases in the minimum wage -- outstripping the rise in average earnings -- have forced employers to rethink their grade structures and to introduce new ways of working. Some have moved towards team working, with most staff on a single spot rate."

Impact on pay determination

According to IDS Pay Report, the national minimum wage has now become:

• the lowest rate on which many pay structures are built
• the key rate in many low-paying firms
• the minimum rate in a range of industry-wide agreements
• a benchmark rate for higher-paying firms to rise above
• an influence on the salaries for clerical staff in areas ranging from banking to the civil service.

Increasing numbers of companies are moving their review dates to October to coincide with the date for uprating of the minimum wage, and differentials at the lower end of pay structures are being squeezed or removed, with grades being merged in many cases.

Want to know more?

Title: "Viewpoint: The minimum wage is now having a major impact", IDS Pay Report 913, September 2004, Incomes Data Services.

Availability: Contact customer services at IDS in London, tel: 020 7324 2599, or email: sales@incomesdata.co.uk.

Incomes Data Services is an independent research organisation providing information and analysis on pay and conditions, pensions, employment law and personnel policy and practice in the UK and the rest of Europe. Find out more at www.incomesdata.co.uk

Posted 7 October 2004