10 Mar National Living Wage
Drum roll please…
If you’ve kept your ear to the ground, you’ll know that the Government’s new National Living Wage will become law as of 1st April this year.
All employees aged 25 or over and not in the first year of an apprenticeship will be legally entitled to at least £7.20 per hour, which is a not too shabby fifty pence per hour extra in their pay packet. What’s more, the Government is committed to increasing this year-on-year and foresees the amount to increase to at least £9 by 2020.
The new rate is calculated independently and based on the cost of living. Hailed as beneficial for businesses and workers alike, a government survey has found that more than 70% of employees have said they’ll feel more positive for themselves and their families, and that 59% will feel more motivated at work.
Working closely with a range of employers, we know that the obligatory increase will come as a double-edged sword. Although many want to invest money in their staff, it could be crippling for smaller businesses in industries such as retail and hospitality. After all, it’s not just the change in wage; it’s the increase in holiday payments, pensions, absences etc.
So it’s important to appreciate that this isn’t an isolated increase; it’s a wider issue that will affect your business over the next four years. You need to think about how you’ll survive this.
The National Minimum Wage will still apply and is likely to rise again in October for 2016/2017. It currently stands at: £6.70 aged 21 and under; £5.30 aged 18-20; £3.87 aged 18 and under; and £3.30 for apprentices.
If you’re struggling to structure your staff pay or don’t fully understand the implications of the National Living Wage, get in touch. We can talk you through it and make sure you’re ready.