ISSUES
: Business and Trade
Chapter 2: Corporate responsibility
37
responsible for setting the
advisory level of the Living
Wage outside London. The LPC
should also consider the impact
on state welfare payments when
setting the National Minimum
Wage.
Ö
Ö
To allow businesses and public
sector bodies to plan, the
Living Wage level should be
announced at least six months
before implementation.
Ö
Ö
The Low Pay Commission
should be asked to provide
an annual assessment of the
impact of the Living Wage on
employment, labour costs,
productivity and other key
metrics.
Ö
Ö
As the financial situation
allows, the government should
reduce the Universal Credit
taper to 55 per cent and
possibly lower and increase
the work allowance in order to
boost work incentives.
Ö
Ö
Where feasible, businesses
should look to open up
development routes within
the organisation for low-paid
workers.
16 March 2015
Ö
Ö
The above information is
reprinted with kind permission
from the Centre for Social
Justice. Please visit www.
centreforsocialjustice.org.uk for
further information.
© Centre for Social Justice 2016
What is the new national living wage?
How the April 2016 change could
affect you
All you need to know about the change to the minimum wage in April.
By Louise Ridley, Assistant News Editor at The Huffington Post UK
U
p to one in three workers
in some parts of Britain will
receive a pay rise when the
new ‘national living wage’ comes
into effect today [Friday], according
to a new study.
The new legal requirement – which
is effectively a new minimum
wage – has been called a “hugely
ambitious policy”, but some areas
will benefit more than others from
the new £7.20 an hour rate and
adults under a certain age won’t
get it at all, the Press Association
reported.
Here are the facts you need to know:
What is the national
living wage?
It is a new compulsory minimum
wage premium from the British
Government – a new higher legal
minimum that employers have to
pay their staff.
It applies only to workers over 25,
and is £7.20 an hour or around
£15,000 a year if you work a 40-
hour week.
The national living wage is a
significant pay increase for
those entitled to it – the previous
minimum wage for people over
21 is £6.70 an hour – around
£13,900 a year if you work a 40-
hour week.
When does it come
into force?
From 1 April 2016.
How is it worked out?
The Government’s new national
minimum wage is calculated based
on median earnings – it ensures
that everyone is being paid at least
55% of the median or average
wage.
The Government also plans to
raise this to at least 60% of median
earnings by 2020 – meaning a rise
to around £9 per hour by 2020.
Is it different to the
‘living wage’ I’ve heard
about already?
Yes. A group called the Living Wage
Foundation has been campaigning
for employers to pay a living wage
– by which is means a wage that
will allow people to afford the cost
of living – for 15 years.
This ‘living wage’, which is
voluntarily paid by some companies
like HSBC, Google and Transport
for London, is calculated based on
the cost of living and is higher than
the Government’s national living
wage.
The living wage is £8.25 an hour
for people outside of London, and
£9.40 an hour for those in London.
How many people will
benefit?
Across Britain, one in six
employees will be affected by the
national living wage, with a total
of 4.5 million people having an
increase on Friday.
This includes around 1.8 million
people earning under £7.20 who
“Up to one in three
workers in some parts
of Britain will receive a
pay rise when the new
‘national living wage’
comes into effect”
