The New National Living Wage

/ / The New National Living Wage


It has been years in the making, but now finally the National Living Wage has become law – completely replacing the National Minimum Wage. The Government is hailing it a ‘step up for Britain’, because yes, more money is always a good thing. And with each qualifying full-time worker set to be £900 a year better off, it certainly does look like a step in the right direction.

For the hospitality industry in particular, this shift change is big news. Why? Because according to the Low Pay Commission the hospitality industry has more workers on minimum wage than any other, so it’s important we get it right.

With that in mind, there are some key questions to ponder. How has the hospitality industry fared with the new rules? Are all employers taking the changes seriously? And most importantly, do all eligible workers know how to make sure they are getting what they are entitled to?

That sounds like a good place to start.

Who is entitled to the National Living Wage?

Hotel staff, housekeepers, restaurant workers, bar staff and beyond are all set to benefit from this increase in pay; in fact, the Government says that over one million people throughout Britain will be better off because of it. But if you’re worried that your wages haven’t yet been improved in line with the new law, don’t worry because help is at hand.

First-things-first, let’s check if you qualify. There are three criteria you need to meet in order to qualify:

  • You need to be over 25
  • You cannot be in the first year of an apprenticeship
  • You needed to have been earning the National Minimum Wage before the changeover

If that’s you, then your wages should have automatically increased as of the 1st April 2016 from £6.70 to £7.20 per hour. Like we said, this means an extra £900 per year for every full time worker. The National Living Wage is also set to rise further (incrementally) to around £9.00 by 2020, which we think is great news.

Are employers taking the change seriously?

Like any major shift in law, teething problems were expected and indeed, have happened. The fact remains that employers are now legally required to pay all eligible employees the increased hourly rate. The Government is sanctioning the change as forcefully as it did with the National Minimum Wage, so those who aren’t compliant will face court fines, business closure or even a prison sentence.

Almost all employers were fired up and ready to increase employee wages in time for the new legislation, but of course there are many reasons why such an undertaking may have been delayed. There’s plenty of assistance online for employers still struggling to make the shift change, as well as helpful advice above and beyond the National Living Wage; like how much younger members of staff should be earning.

How has the hospitality industry fared with the new rules?

With so many workers on the minimum wage throughout the hospitality industry, it was great to hear that Welcome Break has promised to pay all staff the new National Living Wage regardless of age. It’s also a positive sign that all vacancies advertised through Talent Hive were offering the new hourly rate in time for the April change over.

It’s not all good news though, with a number of employers complaining that wage increases will put businesses under pressure. In fact, some outlets, like coffee shops and chippies have been shamed for cutting employee benefits to pay for the rise – something which Chancellor George Osborne has condemned in the Houses of Parliament.

So what should you do next? Well, check your wage slip and make sure that you are being paid the correct amount. Most importantly, if something is amiss – don’t panic.

If you’re not sure whether or not you earn the minimum wage, you can use this simple online calculator to work out your wages. If you’re certain that you are entitled to the new amount of £7.20 per hour, but are yet to see the increase take effect, then speak with your employer, or call Acas on 0300 123 1100.