Kate Brooks
Partner, Solicitor & Head of Employment/HR Services
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Date Published:11 Mar 2016 Last Updated:23 Oct 2021

Living Wage for over 25s to be law from 6 April 2016

Employment Law Advice

It was recently announced in the summer budget that from 6 April 2016 living wage for over 25 year olds will be compulsory. What does this actually mean and what are the pros and cons for employers?

The living wage is not the same as the national minimum wage.

The national minimum wage is compulsory for all workers and is currently £6.50 per hour for workers aged 21 and over. To work out if you are paying national minimum wage there is a useful calculator.

Currently and until 6 April 2016 the living wage is optional and is calculated based on the cost of living in the UK and the amount need to achieve a basic but socially acceptable standard of living.

The living wage is currently £7.85 per hour in the UK (and £9.15 in London). Living wage is promoted by the Living Wage Foundation and further information can be found at http://www.livingwage.org.uk/.

The Foundation shows around 712 accredited living wage employers, however it is very likely that there are many more out there and that many employers pay in between national minimum wage and living wage.

There are clear benefits to paying living wage. Higher wages hopefully lead to happier and more motivated employees.

That being said employers in tough financial times should consider other ways of boosting morale to include regular communication, discretionary and non contractual benefits, and staff treats.

For further information on performance management, staff morale or any national minimum wage issues please contact me at kate.brooks@ellisjones.co.uk.