Staffordshire accountant DJH Accountants Ltd is reminding local businesses that they need to be prepared for the new national minimum wage rates that have just been announced by the government and are due to come into force on 1 October 2010 affecting around 970,000 people nationally.

Ann Tunstall, DJH Payroll Manager says "It is particularly important that those companies who have reduced employee's hours or salary as a short term measure, because of the recession, pay particular attention that they are not falling foul of the new rates."

The minimum wage for adults is to rise to £5.93 from £5.80 per hour for workers aged 21 and over; £4.92 (£4.83) per hour for 18-20 year olds; and £3.64 (£3.57) per hour for 16-17 year olds.

For the first time there will also be an apprentice minimum wage rate of £2.50 per hour, which will apply to apprentices who are under 19 or those that are aged 19 and over but in the first year of their apprenticeship.

The government has also written to the Low Pay Commission (LPC) and has asked them to pay particular attention to the competitiveness of small firms; and the employment prospects of young people, including those in apprenticeships and internships.

The LPC will report to the Prime Minister and the Secretary of State for Business, Innovation and Skills by the end of February 2011, with their recommendations for October 2011.

Businesses also need to be aware of the automatic penalties that were introduced last year to those who do not comply with the National Minimum Wage (NMW) Regulations with penalties ranging from £100 to £5,000.

Ann Tunstall adds; 'When calculating the minimum wage, businesses should be aware that the definition of pay for the purpose of National Minimum Rate can include other elements such as bonus, incentive or commission payments but cannot include benefits in kind, expenses and certain allowances. What to include and what to exclude is vitally important to ensure employers do not make mistakes and end up paying in penalties."