The Living Wage Foundation has increased the real living wage by 30p to £9.30 per hour, and the London living wage by 20p to £10.75 per hour. This could mean pay rises for your staff… here’s what you need to know.
What is the real living wage?
It’s a voluntary rate set by the Living Wage Foundation according to the basic cost of living in the UK. It’s higher than the national minimum wage and the national living wage.
What is the London living wage?
It’s a voluntary rate set by the Living Wage Foundation according to the basic cost of living in London. It’s higher than the national minimum wage and the national living wage.
Do I need to pay the real living wage or the London living wage to my staff?
No, they’re voluntary.
This means that there are no repercussions if you fail to pay staff these rates, but many businesses choose to anyway because of the reputational benefits and increases in staff motivation and loyalty.
When are the new rates effective from?
The new rates are effective immediately.
This means that if you have committed to paying your staff the real living wage or the London living wage, you should raise their pay as soon as possible and by no later than 1 May 2020.
It’s good practice to confirm any pay rises in writing. Here’s a template letter you can use.
What about the national minimum wage and the national living wage?
These rates have not changed, but they are typically reviewed in April each year.
Bear in mind that, unlike the real living wage and the London living wage, the national minimum wage and the national living wage are set by the Government. This means you’re legally required to pay these rates to many of your staff and you could face enforcement action from HMRC if you don’t. The rate payable depends on the age of your staff members.
For further guidance about paying your staff, including who is entitled to the national minimum wage and the national living wage, see Staff pay.
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Before joining Sparqa Legal as a Senior Legal Editor in 2017, Frankie spent five years training and practising as a corporate disputes and investigations lawyer at leading international law firm Hogan Lovells. As legal insights lead, Frankie regularly contributes to Sparqa Legal’s blog, writing content across employment law, data protection, disputes and more.