Tom Herbert
Business Editor
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National Living Wage

National Living Wage

Following on from Russell Huk's NLW post, how are preparations for the new living wage affecting your workload? Is it causing a rethink of costs or additional workload, or is the worry more long term when it hits £9 in 2020?

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07th Mar 2016 10:11

It won’t affect many in the

It won’t affect many in the profession.

Juniors on low income will likely to be under 25 so are not affected by the NLW. Those over 25 are likely to be qualified and / or experienced and earning comfortably over the NLW.

Clients will be affected. It is just another cost to them imposed by the government. It is a legal requirement and they will have to adhere to it.

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By Glennzy
07th Mar 2016 11:09

Trouble brewing.

I do a lot of work in leisure and TBH most of the staff are below 25 and I could see pubs/bars not wanting to hire people over 25 as a result of the commitment to future pay uplifts. They could probably absorb the cost with 20p on a drink price to deal with it, providing GO doesnt slam the duty in the budget.

Healthcare will be hardest hit as mostly their fees are set by local authoriites who claiming they have no money so care home operators are going to struggle to get up the £9 by 2020 unless something gives and some funding is made available for the sector.

The under 25 rule will not really help here as most younger people dont choose healthcare as a career as its hard as oppose to working in Starbucks for the same money.

The sector is also propped up with overseas workers and NHS and private healthcare could not run without overseas labour. Depending what happened with Europe and underlying anti imigration mood that is prevailing this may impact further on healthcare labour market.

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10th Mar 2016 11:42

NLW Impacts to Childcare Sector

Huge impact on the Childcare Sector.  The Government has increased the wage for over 25's, but haven't increased the rate they pay Children's Nurseries for the 15 free hours that 2, 3 & 4 year olds are entitled to.  Also what happens when the Government increases free childcare to 30 hours per week.

I can see Nurseries and Pre-Schools going out of business if the Government does not increase the amount they pay for the "Free Hours".

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10th Mar 2016 11:49

NLW and Salary Sacrifice for Childcare

Another little thought of effect of the NLW is on Salary Sacrifice.  If you have employees who are using salary sacrifice to pay childcare fees, then if they are aged over 25, from 1st April they might not be able to sacrifice as much each month to pay for their childcare costs, so this will effect their net pay as they are not able to save as much in PAYE/NIC.  If they are paid over £7.20 already, they will no get  pay rise and will actually be worse off in net pay.

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