Pay can be a contentious issue in the workplace and it is not unusual for individuals to seek a pay rise from time to time. However, before responding your client should ensure they have a full understanding of the options available to them in this situation.
It is likely that your client will already be familiar with their obligations when it comes to the National Minimum Wage (NMW). Current legislation sets out the minimum hourly rates that staff must be paid, which varies from £4.35 to £8.21 depending on their age. It is vital that your client complies with these requirements, as a failure to do so can result in tribunal claims and punitive action by HM Revenue and Customs.
On the other hand, there is no legal requirement to pay staff in accordance with the voluntary Real Living Wage (RLW) as this is merely a suggested hourly rate which has been constructed by Living Wage Foundation. The RLW is thought to be based on the true cost of living and has two rates of £10.55, for those working in London, and £9.00 across the rest of the UK.
Given that it is voluntary, your client is free to refuse their employees’ request to be paid in line with the RLW. There will be no requirement for your client to justify their decision, however, they may wish to explain if financial limitations are preventing them from being able to issue a pay rise at this time.
Alternatively, rather than dismiss the request for a pay rise out of hand your client may want to consider this further. Given that a large amount of staff has submitted this request together a refusal could have a significant impact on employee relations. Pay can also be a powerful retention tool, therefore refusing to increase salaries in line with the RLW could potentially cause staff to seek employment elsewhere.
Overall whilst your client is free to refuse any request to be paid in line with the RLW they may at least want to give this some thought. When doing so they should weigh up the financial cost of the pay rise and consider if this is worth any potential drop in morale or subsequent loss of talent.
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