The national minimum wage will be extended to 16-17 year-old workers from 1 October 2004, although apprentices will be exempt. The hourly rate has been set at £3.00. From the same date the adult rate rises to £4.85 (from £4.50) and the rate for workers aged 18-21 will be £4.10, up from £3.80. The increases amount to nearly 8% — much greater than the rise in average earnings. The government also intends to change the way in which the national minimum wage applies to piece workers.

From 1 October 2004, employers will have to pay piece workers the minimum wage for every hour they work or they will have to set a fair piece rate under which an average worker will earn at least the minimum wage for the work done. Then from April 2005, the piecework rate will have to be based on 120% of the minimum wage. For example, if a person working at average speed produces 10 items an hour, the fair piecework rate from October 2004 will be 48.5p (£4.85/10) per item, rising to 58.2p next April.