National Living Wage to become law today

From today, April 1, the National Living Wage (NLW) officially becomes law, with workers aged 25 and over entitled to £7.20 per hour.

Image: HW
Image: HW

Employers must check who is eligible to receive the NLW in their organisation, take the appropriate payroll action, let staff know about their new rate and check staff aged under 25 are also earning at least NMW.

The Resolution Foundation said that in some parts of Britain, such as Sheffield, as much as a third of the workforce will get a pay rise.

Workers elsewhere - in London for instance- may see little difference after the NLW is introduced, it said.

The Office for Budget Responsibility (OBR) has predicted that tens of thousands of people could lose their jobs - or see their hours reduced - as employers try to compensate for the extra cost. However the Resolution Foundation believes that 4.5 million will benefit from the NLW this year.

The OBR has calculated that 1.3m workers will see an immediate pay rise, rising to 2.9m by 2020. Government advisors said that the overall cost to business could be more than £1bn this year.

Women between the ages of 25 and 30 and people still working over the age of 66 are expected to benefit most.

Up to half of garden centre and nursery staff could see pay rises in some companies.

Tong Garden Centre co-owner Mark Farnsworth said: "It's something we have to run with. It's fortunate we are in a growing business where we have the opportunity to accelerate our turnover and therefore it's perhaps not as painful as if we were in a mature position.

"The big thing that seems to be getting less coverage is you have to maintain a differential. We've given everyone that increase. Supervisors still have to command a premium. It will mean a 4-5 per cent increase to the wage bill across the business.

"We're in favour of improving working conditions and wages but we hope the government will do it in moderation and will listen to the industry and do it in a sensible, managed way and not try and rush people to make a decision so jobs are lost because they can't afford to pay otherwise."

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