So does the NMW constitute a case of age discrimination?
The Equality Act states the following:
(2) If the protected characteristic is age, A does not discriminate against B if A can show A's treatment of B to be a proportionate means of achieving a legitimate aim.
The question therefore is whether the varying the rates within the Act have been set to achieve a legitimate aim and that the different rates are a proportionate means of achieving a legitimate aim.
The Low Pay Commission (“LPC”) advises the government on the NMW and concludes that varying of the NMW rate does achieve a legitimate aim on the following grounds:
- Unemployment for 21 – 24 year olds not in full-time education is twice as high as for 25 – 30 year olds.
- The reality that the average wages of young workers are lower than older workers due to less experience, less qualifications and higher training costs.
- The rates reflect a more subtle consideration in that education plays a critical role in enabling higher earnings and job security. The NMW has been designed to address exploitation in work, without encouraging young people to enter the labour market full-time who might otherwise stay at school, or college.
- Living expenses of younger people tend to be lower than that of older people.
Therefore the varying rates of pay for different age groups are deemed to be a proportionate means of achieving a legitimate aim as they make employing younger people more attractive to employers, assist in decreasing unemployment levels for younger people, encourage younger people to stay in education, are reflective of the fact that older workers generally have a higher education and greater experience and because younger people tend to have lower living costs.
