The Low Pay Commission has been tasked with evaluating whether young people taking up internships should be paid and to review whether apprentices currently receive a fair wage.
The coalition government has also asked the Commission to examine how current National Minimum Wage regulations could be simplified and made easier to administer as well as to find ways of giving businesses more clarity over future NMW levels.
In addition, the government has proposed abolishing the Agricultural Wages Board and requested that the Commission consider the implications of such a move. The LPC will also continue to review and recommend NMW rises for different age groups, which take effect each autumn.
Outlining the remit of the independent pay body’s 2012 report, the Department for Business, Innovation and Skills asked that it pay particular attention to the issue of youth employment in order to “reflect ongoing concerns about the position of young people in the labour market”.
Trade union umbrella group the TUC welcomed the LPC’s new remit and the focus on internships, which it said were becoming a necessity in many industries for young people trying to get their first job.
But Brendan Barber, its general secretary, added: “Many employers offering unpaid internships are breaking minimum wage law with impunity, and these arrangements exclude the majority of youngsters who don’t have the contacts or financial backing to work for free for months at a time.”
He was also concerned about the planned abolition of the Agricultural Wages Board, which set rates for skills jobs in agriculture, as it would “inevitably lead to falling incomes in farming communities”.
The LPC is due to submit its report to the Prime Minister David Cameron and the BIS Secretary of State Vince Cable by the end of February next year.
The NMW is due to increase for adults from £5.93 to £6.08 an hour from 1 October. For 18-20 year olds, it will rise by 6 pence to £4.98 per hour and for apprentices by 10 pence to £2.60 per hour.