The national minimum wage will increase by 13p an hour to £5.93 today, benefiting an estimated one million mainly women workers.
A new hourly rate of £2.50 will also be introduced from today for apprentices, who previously did not qualify for a statutory wage.
The age threshold for paying the adult rate will be reduced from 22 to 21, giving an estimated 50,000 people a pay rise of more than 20%.
To mark the increase, the Government announced that employers who deliberately flouted minimum wage laws will be publicly named under a new scheme.
Employment relations minister Edward Davey said: "Bad publicity can be a powerful weapon in the fight against employers who try to cheat their workers and their competitors. Their reputation can be badly damaged if they are seen to be flouting the law.
"Responsible employers should also make themselves aware of the new rates that come into effect today. The increases to the national minimum wage this year are appropriate for the economic climate. They will strike a balance between helping the lowest paid whilst at the same time not jeopardising their employment.
"The Low Pay Commission estimates that around 970,000 people stand to benefit from these increases."
TUC general secretary Brendan Barber said: "This increase will put extra cash in the pockets of some of the UK's lowest paid workers and today there are also significant gains for apprentices and young workers.
"The minimum wage has already helped hundreds of thousands of families without any negative side effects and its success has shown that - despite scare-mongering from some business voices - the economy can easily cope with sensible labour market regulation. Indeed, our current economic woes seem to be caused by too little regulation rather than too much."
The hourly rate for 18- to 21-year-olds will increase by 9p to £4.92, while for 16- and 17-year-olds the minimum wage goes up by 7p an hour to £3.64.
The new rates come in as Her Majesty's Revenue and Customs (HMRC) and the Business Department published their national minimum wage annual report for 2009/10, which showed inspectors retrieved more than £4.4 million in arrears for over 19,000 workers.
The average arrears per worker was £228, 18% higher than the previous year.
Regulations cracking down on rogue operators in the modelling and entertainment sector - banning upfront fees for aspiring models and significantly tightening the conditions attached to them elsewhere - also come into force today.
British Retail Consortium director-general Stephen Robertson said: "There's a delicate compromise between higher wages and more jobs, but the best protection for wages is preserving jobs to keep people working.
"Anything up to a 1.7% increase in next year's minimum wage strikes a sensible balance between helping low-paid workers and enabling retailers to create and maintain jobs. It's the private sector that will drive the economic growth that will provide the jobs and tax revenues of the future.
"But consumer confidence is fragile, while the impact of the Government cuts and nervousness about the housing market are creating a lot of uncertainty."
British Retail Consortium director-general Stephen Robertson said: "There's a delicate compromise between higher wages and more jobs, but the best protection for wages is preserving jobs to keep people working.
"Anything up to a 1.7% increase in next year's minimum wage strikes a sensible balance between helping low-paid workers and enabling retailers to create and maintain jobs. It's the private sector that will drive the economic growth that will provide the jobs and tax revenues of the future.
"But consumer confidence is fragile, while the impact of the Government cuts and nervousness about the housing market are creating a lot of uncertainty."
GMB general secretary Paul Kenny said: "The national minimum wage was the crowning piece of legislation of the last Labour government and this increase for 2010 was put in place before the General Election.
"It is essential that the electorate keep up the pressure on the Tory-led Government not to dilute this essential protection for ordinary workers and their families.
"There are hundreds of thousands of workers all around the economy who are facing pay freezes and will not be offered any increase to cover rising bills for energy and fuel and food."
TUC general secretary Brendan Barber said: "The decision to list publicly employers who flout national minimum wage laws is the correct one. We need to see more rogue employers named and shamed in order to act as a deterrent."
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