Day one of new National Living Wage

EMPLOYERS must pay their staff the new mandatory National Living Wage of £7.20 an hour for workers aged above 25 from today.

The NLW announced by Chancellor George Osborne in last summer’s budget will give about 1.3 million workers in the UK an immediate pay rise.

Workers aged 21 to 24 will continue to get the National Minimum wage which is set at £6.70 an hour.

The long term goal is for the NLW to rise to more than £9 an hour by 2020.

Although the unions and the independent Living Wage Foundation have broadly welcomed the rise, there are fears it could lead to job losses.

The Office for Budget Responsibility has said 60,000 jobs could be asked as a result of the NLW.

But the Living Wage Foundation which has consistently pushed for higher wages at the lower end of the labour market is urging companies to pay more than the statutory minimum.

The Foundation’s own recommended voluntary living wage level is set at £8.25 for the regions and £9.40 in London.

Some North West employers, including Mancheter-based social housing regeneration company Procure Plus and many firms in its supply chain, are already doing this.

“The job is not done when it comes to tackling low pay,” said the foundation’s director, Katherine Chapman told the BBC.

“Businesses who can afford to pay a rate that reflects the real cost of living should do so and join over 2,300 employers signed up to pay our higher voluntary Living Wage.
 
“For profitable business or those who see themselves as innovators and leaders, simply not breaking the law on pay is not enough. Many businesses want to aim higher.”

Meanwhile the TUC said the Government needed to make sure everyone benefited from the NLW.

General secretary Frances O’Grady said: “Britain desperately needs a pay rise, and this increase is good news for those aged 25 or older.

“But the government must ensure that younger workers are not left behind; 21 to 24-year-olds will not be seeing an increase.

“This is not fair. Future wage increases must narrow the pay gap between old and young.”