Government urges UK to prepare to pay National Living Wage

Posted on 8 Dec 2015 by Victoria Fitzgerald

Firms have been advised to take simple steps now as poll reveals 93% of bosses support the initiative, with majority believing it will boost productivity and retain staff.

Britain’s bosses are urged to take four simple steps to be better prepared for the introduction of next year’s new National Living Wage (NLW).

As the statutory instrument was laid to be written into law yesterday, businesses are being advised to prepare early for the changes on 1 April, 2016, when the new wage will become law, and make sure they follow these four simple steps:

  • Know the correct rate of pay – £7.20 an hour for staff aged 25 and over
  • Find out which staff are eligible for the new rate
  • Update the company payroll in time for 1 April, 2016
  • Communicate the changes to staff as soon as possible

The advice coincides with a new poll which revealed 93% of bosses agree the new wage is a good idea, with 88% believing it will lead to higher productivity, and 83% saying it will make staff more loyal to their firm.

Nick Boles, Minister for Skills and Equalities
Nick Boles, Minister for Skills and Equalities

Business Minister Nick Boles commented: “The Government’s new National Living Wage will provide a direct boost to over two-and-a-half million workers in the UK – rewarding and providing security for working people.

“I am urging businesses to get ready now to pay the new £7.20 rate from 1 April 2016. With just under four months left, there are some easy steps employers can take to make sure they are ready.

“By taking these measures, companies will be able to properly reward their staff and avoid falling foul of the law when it takes effect.”

The new survey conducted for the Department for Business, Innovation and Skills (BIS) asked 1,000 employers across Britain about the NLW.

When asked if they thought the new rate would be good for businesses, many respondents identified a range of positive impacts:

  • 93% of all bosses agreed the National Living Wage was a good idea
  • 88% said it would make staff more productive
  • 83% believed it would make staff more loyal towards their employer
  • 86% said it would boost staff morale
  • 82% believed customers were likely to return if the business paid the right rates of pay.

Despite the popular support for the measure, the poll also revealed that many firms were yet to take key steps to be prepared:

  • Only around 45% had updated payroll to take account of staff aged 25 and over on 1 April 2016
  • Just 39% had communicated the upcoming changes to staff
  • Only 29% had looked online for more information about National Living Wage entitlement.

This comes despite 63% of bosses saying they knew who in their business should be getting the new National Living Wage.