The world's largest food company, Nestle, has become the first large manufacturer to announce it will pay the living wage to all its staff.
The living wage is based on the amount an individual needs to earn to cover the basic costs of living.
Living costs vary in different parts of the country so there is a different rate for London and the rest of the UK.
The living wage is now set at £8.80 an hour in London and £7.65 an hour elsewhere.
“As a major UK employer, we know that this is the right thing to do. Not only does it benefit our employees but also the communities they live and work in,” Nestle UK & Ireland chief executive Fiona Kendrick said.
The move is considerably momentous not only for the firm’s 8,000-strong workforce which is already being payed the living wage, but the company’s contractors, who will also have the wage extended to them by the end of 2017.
Since October 1, 2013, the national minimum wage has been £6.31 an hour for adults aged 21 and over, and £5.03 for those aged 18 to 21.
“We hope that the leadership they have shown will encourage others in this industry to follow suit and improve conditions for those at the lowest end of the pay scale and sub-contracted staff,” Living Wage Foundation director Rhys Moore said.