The ‘Real’ Living Wage
Not to be confused with the NLW, the Living Wage, sometimes referred to as the ‘Real’ Living Wage is an hourly rate based on the actual cost of living in the UK.
The Living Wage Foundation, a campaigning organisation in the UK, calculate this every year based on the actual costs of living in the UK. Unfortunately, there is no legal grounding for this but they recommend £9 per hour across the UK and for London £10.55 per hour.
This is considered to be more of a realistic representation of what employees need to be earning in order to sustain the basic costs of living such as rent, groceries and utility bills.
By focusing on the fact that no one working full time should not earn enough to live on. This reflects the view that employers have a joint responsibility with the state to support decent living standards.
The independent Living Wage rates have always taken into account some government support such as that for affordable housing, childcare and tax credits. This support is particularly important for single parents. who often need to work part time? Employers have a duty to meet a benchmark that (in addition to this government support) ensures full time employees earn a wage that meets at least the cost of living.
Why should you pay more than the National Minimum Wage?
As an employer it might seem a bit ridiculous to pay employees more than you legally have to. However, studies by the Living Wage Foundation have shown many benefits by doing so including increased employee retention, decreased absenteeism, and enhanced quality of work produced.
In a recent survey conducted but The Living Wage Foundation on companies who pay the ‘Real’ Living Wage they found:
For businesses that are able, these figures show that going above and beyond statutory minimums has noticeable benefits.
Having a payroll partner like Paycheck Plus, can make implementing a change like this simple and pain free.
Paycheck Plus, Your Payroll Outsourcing Partner
Managing payroll is a complex and time-consuming operation. Keeping up to date with ever evolving legislative changes, ensuring payroll compliance and delivering employee wages accurately and on time takes its toll on a business’ senior resources. Here at Paycheck Plus, we’ve been providing comprehensive payroll services tailored specifically to each of our client’s needs for over a decade. Our payroll specialists handle all aspects of payroll management for our clients including answering our client’s employee queries through our Employee Assist Helpline.
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