The minimum wage for workers in the UK will rise by 11p to £6.19 an hour in October.
This 1.8% hike will apply to all workers over the aged of 21.
However, anyone below this age will not see a rise, with the minimum wage remaining at £4.98 for 18 to 20-year olds and £3.68 for 16 and 17-year olds.
David Norgrove, chair of the Low Pay Commission (LPC), says: "Although the economy is forecast to grow through 2012 and 2013, the expected pace of growth is uncertain and is likely to be low. We believe our recommendations for October 2012 balance the needs of low-paid workers against the challenges facing businesses, particularly small businesses."
However, the move has been criticised by union leaders.
"The LPC should have been bolder in its recommendations. Even in the current economic climate there was room for an increase in the minimum wage that at the very least kept pace with inflation and earnings," says Brendan Barber, general secretary of the TUC.
"Many of the businesses that are calling for the minimum wage to be frozen are also complaining about the lack of consumer spending. Boosting demand is vital - but this will not be achieved by squeezing the low paid even further," he adds.