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Businesses aren’t prepared for the National Living Wage

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Businesses aren’t prepared for the National Living Wage

From 1 April this year every business will need to pay employees over the age of 25 the new statutory National Living Wage (NLW) of £7.20 per hour.

Following this change, full-time members of staff working 37.5 hours per week who are currently on the national minimum wage will see their wages increase by £975 per annum.

This increase in payroll costs could have a significant impact on some businesses, especially those with multiple members of staff currently receiving the minimum wage.

However, despite this significant hike in wage costs, a new survey from the Department for Business, Innovation and Skills has shown that only 45 per cent of businesses had updated payroll to take account of staff aged 25 and over, while just 39 per cent had communicated the upcoming changes to staff, and only 29 per cent had looked online for more information about NLW entitlement.

Their study of 1,000 employers from across the UK also revealed that 93 per cent agree the new wage is a good idea, with 88 per cent believing it will lead to higher productivity.

Of those polled, 83 per cent also said the measure will make staff more loyal to their firm, while 82 per cent believed customers were likely to return if the business paid the right rates of pay.

Link: BIS research into NLW


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