National Minimum and Living Wages?


How can West Berkshire businesses handle the rise to the National Minimum and Living Wages?

  • The headline National Living Wage rate has risen to £7.50 per hour.

  • Employers should tread carefully when responding to the rises.

  • Businesses that fail to comply will face large fines and public naming and shaming.

It has been well reported that on 1st April, the National Minimum and Living Wages rose, affecting the whole workforce.

These wage rates are important for protecting society’s lowest paid. And paying staff well is an obvious tactic for recruiting and retaining good employees. But even so, local employers are facing many pressures on staffing costs, so how to handle the rise?

Let’s start with what you cannot do. Dismissing staff purely because they qualify for the National Living Wage is not an option! Do this and your employees will be able to claim automatic unfair dismissal, as employment law protects against this.

Outsourcing to the ‘gig economy’ should be treated with caution too. Some businesses have taken on these ‘self-employed workers’ to avoid paying NI contributions, wage obligations, employment rights, and auto enrolment. But this approach could still result in litigation. Uber drivers took Uber to a tribunal and won, and there have been other high profile cases too.

Ignoring the minimum wage obligations is certainly not an option. Business owner could be fined up to £20,000 per worker plus wages due, as well as face a public naming and shaming.

The most positive way forward is to embrace the rises as part of a drive to increase productivity. Creating the right environment for employees to thrive and develop, and offering better pay and conditions than your competitors tends to create workers who are more inclined to go the extra mile for their organisation. Make sure wage rises are well communicated along with any other benefits you offer.

If your business is struggling to meet the increased financial obligations, then you might consider redundancies. Tread carefully though. It must be the role that is made redundant, not the person. Get this wrong, and that is another sure-fire route back to the courts. If you would like specific advice and guidance on this or any other aspects of people management please get in touch.

If you would like specific advice and guidance on this or any other aspects of people management please get in touch. www.hrdept.co.uk

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