Low Pay Commission 2025

The 2025 consultation covers the following:

• The affordability and effects of an increase in April 2026 to a National Living Wage (NLW) rate within the range of £12.50 to £12.80 (noting that these figures are indicative only).
• The impact so far of increases in the NLW in April 2025 on workers, employers, the labour market and economy.
• The effect of recent minimum wage increases for younger workers on their employment prospects.
• How to extend the NLW to all workers aged 18 and over (whether by raising the level, lowering the age threshold or a combination of the two) and what the impact of a reduction in the age threshold might be.

Our submission focusses on the proposals around young people, who we think are widely represented in two, potentially slightly overlapping, categories of individuals who may not currently be paid at least the NMW:

• those with limb b ‘worker’ status (for example as has been found in the cases of some online platform/app based workers like food delivery riders) - but where the engager is unaware of this or is unaware of the implications
• those who are employees/’workers’ but are deliberately treated as self-employed by the employer (‘false self-employment’).

Our core concern is this: without better understanding of employment status among individuals and engagers alike, along with stronger enforcement, increases in the NMW/NLW may pass people by and/or inadvertently fuel exploitative practices. While we think this is an issue that affects the whole workforce, we believe the problem is particularly concerning among young people with less experience and/or labour market power.

We urge the LPC

• to ensure that any upward movement in pay rates for younger people is accompanied by better education around the NMW for ‘workers’ - for individuals, engagers - and minimum wage enforcement officers.
• to assess the risk of employment status misclassification and deliberate minimum wage avoidance in the form of false self-employment, more explicitly in its work.

More broadly, we would like to see coordinated work between the LPC and other relevant parts of government HMRC, DBT, DLME etc. to consider the interaction between NMW policy, employment status, and enforcement capacity.