The government has announced the introduction of a new National Living Wage (NLW) for working people aged 25 years and above.
The NLW is effectively another higher age band of the National Minimum Wage (NMW). Initially the NLW is set at 70p above the current NMW, although this will fall to 50p when the NMW increase comes into effect in October 2015. Further increases are to be recommended by the Low Pay Commission in order to achieve the government’s objective of reaching 60% of median earnings by 2020. This means that NLW increases will be independent of the NWM wage increases for each age band that are made annual in October.
The impact on small businesses
Ian Bryan, Head of Business Services, said: “The additional funding needed to cope with increases in wages with the introduction of the National Living Wage is likely to preoccupy many small business owners, particularly in conjunction with the recent onset of Auto Enrolment.”
“The impact of the National Living Wage will vary significantly across different sectors, with small shops, hospitality firms, retailers and care providers, in particular, facing real challenges in affording the additional expenditure. It is therefore vital that, in a time of increasing costs and pressures to maintain margins, that you seek sound and proactive financial advice.”
For more information on how Hawsons can help, please contact Ian or visit our Business Services page.