Firms to cut employee benefits following changes to National Living Wage (NLW), finds Sonia Rach.
Companies which cut staff incentives to compensate the new minimum wage should be mindful of their reputation, according to Chancellor George Osborne. He explained that it was “not the spirit of the law” and firms should be publically shamed.
B&Q, Morrissons, Ginsters, Eat and Waitrose are just some that are cutting pay and benefits as a result of the National Living Wage rise, however most have said the changes were unrelated. Caffe Nero has also cancelled employees’ free lunches to offset the wage hike.
Osborne’s pay rise came into effect on April 1st, raising the minimum wage from £6.70 to £7.20 for workers over 25. Many campaigners have welcomed the change, however business owners have criticised it, believing it to be an unfair burden. The British Retail Consortium has predicted the NLW could approximately cost retailers between £1bn – £3bn each year.
In an appearance on ITV’s The Agenda, Osborne said: 'I think that companies these days should be much more careful about their reputation and much more aware of their social responsibility to their workforce as well as to their community. I think they are being outed.”
Philip Davies, Tory MP, also commented on the matter by referring to the “whole concept of a National Living Wage is an intellectual nonsense.”
“The fact is the amount of money people need to earn to cover their living depends on all sorts of different factors. The idea that there is one National Living Wage that can apply to everybody in the whole country irrespective of their personal circumstances is a nonsense. If you put up the cost of employment you will find less people employed. That’s just an economic fact.'
The Office for Budget Responsibility (OBR) has warned that by 2020, 60,000 jobs will be lost as a direct impact of the National Living Wage.
To find out more about employee benefits and the new National Living Wage, come along to Reward Live where experts will discuss the radical changes expected over the next 12 months. It will be taking place on 11-12 May at Edgbaston Cricket Ground, Birmingham. For more details, CLICK HERE