Did you know the National Living Wage has gone up?

If you have staff, hopefully you will be aware that the National Living Wage (previously the Minimum Wage) increase came in to play as of Sunday, 1st April 2018. For those aged 25 and over, their hourly rate of pay has increased by 33 pence from ï¿¡7.50 to ï¿¡7.83.

Of course, this pay rise doesn’t just impact those over 25; younger members of staff will also have seen an increase. Those in the age bracket 18-20 will now be receiving ï¿¡5.90, 21-24 year old can expect ï¿¡7.38. Individuals under 18 will be paid ï¿¡4.20 per hour, whilst apprentices must receive ï¿¡3.70.

It is currently anticipated that two million people will be impacted by these new rates of pay, with the average worker being ï¿¡600 better off per year.

However, not everyone is happy with this increase.

The Living Wage Foundation, a voluntary organisation, says that there is a fundamental difference between the Living Wage (as proposed by the Treasury) and the Real Living Wage (RLW). The RLW is calculated annually, in November, and is based on how much a basket of groceries costs. It takes in to account the actual cost of living, and as things stand, it is suggested that ï¿¡8.75 per hour would be a truer reflection on the costs that members of staff face in their day to day lives.

The Foundation also suggests that this cost is higher in London (for example, ï¿¡10.20) as the costs of goods tends to be higher. As things stand, there is one set Living Wage for the whole of the country. They also argue that rates of pay should be the same for all those over 18 years of age, as these individuals, regardless of age, face the same day to day expenses as everyone else.

Employers can sign up to the Living Wage Foundation’s pledge to pay all staff the Real Living Wage; however, this is not compulsory and there are no legal ramifications if they choose not to. There are some advantages though, as many clients and customers would prefer to pay more for the cost of products or services if they felt the profits were being used to ensure staff were paid fairly for their work.

By paying the Real Living Wage, employers can ensure that their staff aren’t having to struggle to make ends meet, and will have a better financial quality of life. In theory, at least.

If you need any advice about your legal obligations, or how to manage your payroll and other HR requirements, don’t hesitate to get in touch with either myself, or the team at People Matters.