But why do we increase this yearly and what will the new rates of pay be for those who fall under these rates?
Industria have done some extensive research into the above questions that seem to be on everybody’s mind each year.
When and why was NLW introduced and what was a reasoning behind this?
The National Living Wage (NLW) was introduced on April 1st 2016, and applies to all those over the age of 25. The NLW, or National Minimum Wage Premium to give it its formal title. The objective of the NLW is to raise the minimum figure that employees can earn in line with a percentage of the average hourly salary of a worker over the age of 25. The introduction of the NLW affected some 2.7m individuals, and back in April 2016 they will have seen a difference in their pay packets and each year after this going forward. The outcome that government are expecting is that they will create better quality employees and boost business moral across the board.
Other research conducted in the months running up to the introduction of the NLW has suggested that the benefits felt by employers as well as employees will outweigh any financial considerations. Improving employee’s salaries can improve staff turnover, retention, and lower absence rates, all pointing to a heightened level of employee engagement. We felt a professional impact in a high percentage of our workers since this yearly increase has been introduced.
What are the new pay rates for 2020?
National Living Wage (NLW) will be increasing from £8.21 to £8.72 this will give a pay rise of up to £930 for a full-time worker. Overall a 6.2% pay increase which is announced as the biggest cash increase ever by the UK Government.
Prime Minister Boris Johnson said:
“Hard work should always pay, but for too long, people haven’t seen the pay rises they deserve.”
Chancellor of the Exchequer, Sajid Javid, said:
“We want to end low pay and put more money in the pockets of hard-working families. This latest rise will mean that since we introduced the National Living Wage in 2016, the lowest paid will have had a wage increase of more than £3,600.”
Business and Energy Secretary, Andrea Leadsom, said:
“We want to make the UK the best place in the world to work and grow a business. Employment is at a record high and as well as investing to meet that ambition, we also want to make sure that people get to keep more of what they earn.”
2020 NMW/NLW rates increase
The National Minimum Wage will rise across all age groups, including:
So what are your views on the yearly increases and how do you feel it effects your business, workforce and recruiting process?
Heidi Grimstead - Business Development Manager