New 2015 Living Wage Rate announced
The UK "living wage" - an hourly rate based on the amount needed to cover the basic costs of living - has been raised by 20p to £7.85, whilst The London Living Wage has been raised from 8.80 an hour to £9.15.
What is the difference between the Living wage and the national minimum wage?
The living wage is an informal benchmark, not a legally enforceable minimum level of pay line the national minimum wage. The national minimum wage is set by the business secretary each year on the advice of the Low Pay Commission. Unlike the living wage, the national minimum wage is enforced by HM Revenue and Customs (HMRC).
The basic idea of the living wage is that these are minimum pay rates needed to let workers lead a decent life.
Does this effect employers?
The living wage is a voluntary wage so employers are not legally obliged to pay it. Nevertheless, it has been adopted by more than 1,000 employers across the country benefitting 25,000 workers. Citizens UK, the community behind the living wage project say that the number of companies paying the rate has doubled in the last year. However, some business groups are not happy with the increase saying some employers might struggle to pay it.
The advice to employers should be to seriously consider the living wage, but only implement it if it is affordable.
Bright Contracts – Employment Contracts and Handbooks.
BrightPay – Payroll & Auto Enrolment Software.
UK minimum wage to rise to £6.50 in October, government confirms
The government has approved a rise in the national minimum wage (NMW) to £6.50 an hour in October this year, as recommended by the independent Low Pay Commission (LPC).
This change is expected to boost take home pay for more than one million employees who could see their wage increase by as much as £355 a year..
From the 1st of October 2014 NMW rates will be:
- a 19p (3 per cent) increase in the adult rate (from £6.31 to £6.50 per hour)
- a 10p (2 per cent) increase in the rate for 18 to 20 year olds (from £5.03 to £5.13 per hour)
- a 7p (2 per cent) increase in the rate for 16 to 17 year olds (from £3.72 to £3.79 per hour)
- a 5p (2 per cent) increase in the rate for apprentices (from £2.68 to £2.73 per hour)
Bright Contracts – Employment contracts and handbooks.
BrightPay – Payroll & Auto Enrolment Software
