Employers in Lancashire are being warned to prepare carefully for tighter rules governing payment of the increased national minimum wage which come into force in October.

Chartered accountants say the changes mainly affect payments to pieceworkers and subcontractors who may be entitled to higher rates.

In future, home-based pieceworkers will be entitled to a rate for the job equivalent to the full new minimum wage of £4.85 an hour, instead of only 80 per cent of NMW.

And employers who think their subcontractors are exempt could find themselves breaking the law. Another change is that for the first time, the minimum wage will apply to 16 to 17 year olds who must be paid at least £3 an hour.

Shamim Mahomed, President of the North West Society of Chartered Accountants, said employers should assess the impact of higher wage bills, and ensure their methods and rates of pay complied with the new regulations.

"Many firms have assumed their self employed subcontractors working from home, such as seamstresses and commission-only salespeople, weren't covered by the national minimum wage but they may well be wrong," she said.

"The reality is that the minimum wage is payable to all workers if they're not carrying out a genuinely independent business and any written agreements to the contrary won't change that."

Mrs. Mahomed said the increase for pieceworkers amounted to nearly 35 per cent.

It would rise again next April when they would be entitled to 120 per cent of NMW.

"Firms would be well advised to assess to extra costs involved and to examine what impact it might have on their prices," she added.