On the first Monday in November each year, the voluntary living wage is increased. This provides a pay rise for over 150,000 workers, however, not all of your clients will have to increase staffs’ pay.
The living wage is a voluntary scheme ran by the Living Wage Foundation. The campaign group sets minimum rates of pay based on the “real cost of living” calculated using factors such as the price of travel, accommodation and household goods. There are separate rates depending on whether the individual works in London or not, to take in to account the higher cost of living in the capital.
From 6 November 2017, the voluntary UK living wage has increased from £8.45 to £8.75 per hour. The London living wage has increased from £9.75 to £10.20 per hour; the first time minimum wage has topped £10 an hour. The rates apply to all workers aged over 18.
Your client needs to start paying the new increased rates if they have opted-in to be a living wage employer. There are currently around 3,600 organisations who have joined the scheme, including many large employers such as Heathrow Airport, Google and IKEA. Due to the voluntary nature of the scheme, employers have up to six months to start paying the higher rates, with workers receiving the increased hourly pay rate by the following May at the latest. Your clients can choose to sign up to the scheme and commit to paying these rates in the future, although they will have to meet the specific accreditation rules in place.
The annual November increases to the voluntary living wage do not affect the statutory minimum wage rates. The National Living Wage, the minimum rate for workers aged 25 and over, remains at £7.50 per hour and the National Minimum Wage rates also remain unchanged. This discrepancy means a 25-year-old worker will receive £2.70 more per hour if they work for a living wage employer.
The government will continue to review and update the statutory minimum wage rates each year, following recommendations from the Low Pay Commission. All increases will now take place each April, with the first consolidated increase set to apply from April 2018.
