Striking the right balance in response to the national living wage

Publication: People Management

It’s a month and a half since the national living wage (NLW) of £7.20 was introduced for employees aged 25 and over and already a handful of the UK’s largest and best-known companies have seemingly attempted to offset the 50p an hour increase against existing employee benefits, resulting in some employees actually being worse off.

Apparently this was not the intention behind the change to the hourly minimum rate. In a House of Commons debate on the issue, Department for Business, Innovation & Skills minister Nick Boles said the government wanted to hear about companies that seemed to be “trying to evade the spirit of this legislation in a way that is unreasonable” and promised to “put pressure on” those companies to live up to their legal and moral obligations.

However, it may not be against the law for employers to take steps to mitigate the effect the new minimum wage has on their business, if the change is being made across the workforce, and provided a genuine business need can be established for it. For example…

To read the full article, please click here to go to CIPD’s website.