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Low Pay Commission

08/12/2015

Low Pay Commission

Last week we attended a meeting with the Low Pay Commission to discuss the new National Living Wage that is due to come into effect in April 2016.

This is an addition to the minimum wage (i.e. it is just a further level of national minimum wage for over 25 year olds) and it has caused considerable concern for many organisations since its announcement earlier this year. The move to £7.20 represents a significant increase and in addition to this, it has been made clear by George Osborne that he wishes this to increase up to £9.00 per hour by 2020.

This is happening at a time when smaller businesses are also having to cope with the new pensions requirements (and compulsory contributions).

I cannot offer any reassurances after attending the meeting. While there was some sympathy for SME's it was also clear that the Government would go ahead with the new NLW and that the loss of some jobs would be acceptable to them if the overall outcome was to increase wages. Only if these changes have a significant adverse affect on employment / the economy, will the Government consider slowing down the implementation. The problem with this is that it will take time for any real impact to be seen - and indeed it could then be too late for many SME's (and the economy as a whole!).

On this note the Low Pay Commission have said they would welcome any case studies that could help their ongoing evaluation of the situation. So if you have any examples that you are happy to share with the Low Pay Commission, we would be happy to pass this on and they have said they would be happy to receive any evidence.  These may be related to increased costs and/or the effect on employment. They may also include how you may be considering restructuring or initiatives to help efficiencies or automation in light of the changes.

We will continue to put forward the view of our Clients and SME's on this and other matters. The Essex Chambers of Commerce also continue to lobby on behalf of its members on a wide range of issues affecting businesses in Essex and we are grateful to them for allowing us to voice your views at the recent meeting.

Paula Fisher. You can contact Paula at paula@practical-hr.co.uk


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