Increases in the National Living and Minimum Wage

The Living Wage is a concept and ideal which has been acknowledged by commentators throughout history. President Franklin D. Roosevelt noted that, “no business which depends for existence on paying less than living wages to its workers has any right to continue in this country.”. His capitalist Presidential successors have evidently not been of the same mind, the federal minimum wage currently standing at only $7.25 per hour, but the United Kingdom has been making some progress in this area

The National Living Wage was introduced by the Conservative Government on 1^st April 2016, applying to all workers aged 25 or over. As of today, 1^st April 2020, the National Living Wage stands at £8.72 per hour.

In the 2020 Spring Budget, the Chancellor of the Exchequer, Rishi Sunak, pledged that the National Living Wage will represent two thirds of the median wage by 2024, a projected figure of £10.50 per hour. This was also pledged by the previous Chancellor, Sajid Javid, in his pre-budget statement in Autumn 2019, together with plans to expand the reach of the National Living Wage to cover workers aged 23 and over from April 2021, and to those aged 21 and over within five years. This was not something that was included in the 2020 budget.

The National Living Wage is still below the ‘real’ living wage, a figure calculated by the Living Wage Foundation as the actual hourly rate of pay needed by workers. This voluntary rate currently stands at £9.30 an hour and £10.75 in London, higher than the current statutory rate. Companies can voluntarily sign up to commit to paying all staff and any third-party contract workers this wage; professional football clubs such as Everton, Liverpool, Chelsea and West Ham have all made the pledge, while some football clubs outside the top league, such as Championship side Luton, also pay the voluntary rate.

The current minimum wage rates are as follows:

• 25 years and over – £8.72 per hour
• 21 to 24 years – £8.20 per hour
• 18 to 20 years £6.45 per hour
• 16 to 17 years £4.55 per hour
• The apprentice rate for those aged under 19 or in the first year of an apprenticeship will increase from £3.90 to £4.15 per hour

If you want to discuss any employment issue, please contact our employment team at employment@franklins-sols.co.uk or by calling our offices on 01908 660966 or 01604 828282.