Late in October, an increase in voluntary living wage rates was announced, resulting in almost 3,000 employers paying their workers a minimum of £8.45 an hour or £9.75.
The Living Wage rates are voluntary, but almost 3,000 companies have promised to pay them to their employees, which means roughly 120,000 low-paid workers will see an increase in their salary. These businesses have until 1 April to introduce the new rates. The London living wage has increased 3.7% and the non-London, 2.4%, since last year an. A full-time worker on the living wage will earn £45 a week more than one on the government minimum: 95% a week more in London.
There has, however, been some criticism of the living wage campaign, mainly that it has been the most successful in attracting financial institutions who do not employ a large proportion of low-paid workers (therefore the ‘hit’ to their wage bill wouldn’t be so big). Yet companies such as Curzon Cinemas, Oliver Bonas and Ikea have joined up over the last year. Ikea have actually recorded a slight reduction in staff turnover since starting to pay the living wage last April.
Despite this good news for low-paid workers, research for KPMG has shown that one-in-five UK workers earn less than the living wage, with part-time employees more likely to miss out. 43% of part time employees receive an hourly wage which falls short of the basic cost of living compared to one-in-seven full-time employees.
If you have any queries around implementing the voluntary living wage, the please do get in touch for advice.