The Daily Mail today reported that: “The wages of one employee in six across Britain – or 4.5million workers – will rise from today. Campaigners have hailed it as a boost for the low paid.” But managing the fallout of this “boost” is no small task for employers.
And with B&Q in the crossfire for reportedly threatening to sack employees if they don’t sign a new contract which reduces by £1000 each their existing benefits entitlement, it may not be a lawful solution to reduce benefits to which staff are contractually entitled in order to balance the hike in salary levels – it’s certainly going to be controversial.
Our experience with the minimum wage legislation over the years is that an increase like the living wage today changes the playing field. To maintain pay grade differentiation between roles it often forces up costs beyond the bottom pay grades. The legislative force and the mass publicity of an event like the living wage means employers do have no choice but to adapt quickly. Employers who aren’t prepared may end up paying a higher price when employees legitimately challenge them afterwards!
The wages of one employee in six across Britain – or 4.5million workers – will rise from today. Campaigners have hailed it as a boost for the low paid.But James Sproule, of the Institute of Directors, warned: ‘If new taxes or red tape make it more expensive to employ people, companies will have to adapt by holding back pay rises, taking on fewer staff, or passing on the cost to customers.'