National Living Wage – too far, or not far enough for manufacturers?

National Living Wage – too far, or not far enough for manufacturers?

In his July 2015 budget, Mr Osborne announced that with effect from April 2016, a premium will be added on to the ‘National Minimum Wage’ (NMW) for all workers aged 25 and over.

This premium termed the ‘National living Wage’ (NLW), will give an effective pay rise of 50 pence per hour to every UK adult worker aged 25 and over who receives NMW and will take that worker’s rate of pay to £7.20 per hour.

Workers aged 21-24 will continue to receive NMW and will not be entitled to the NLW premium.

The minimum level at which staff should be paid once again came sharply back into focus at the beginning of November 2015, with the Living Wage Foundation announcing a further increase to the recommended LW to £9.40 an hour in London and £8.25 per hour in other parts of the UK.

Whereas it remains open to manufacturers to consider whether they wish to become an accredited partner of the Living Wage Foundation and pay a living wage, payment of NLW from April 2016 will not be voluntary.

Any employer that fails to keep appropriate pay records, fails to pay its workers NMW, dismisses and / or treats workers to their detriment for matters associated with NMW, can face criminal prosecution, public naming and shaming, as well as possible claims from aggrieved workers in the County Court or Employment Tribunals.

Right or wrong, the introduction of NLW in April 2016 will take the governments stated policy objectives one step closer: “The government wants to move from a low wage, high tax, high welfare society to a higher wage, lower tax, lower welfare society” – Department for Business Innovation & Skills (BIS), Policy Paper, National living Wage (NLW), 24 August 2015.