National Living Wage
The government has announced the introduction of a new National Living Wage (NLW) for working people aged 25 years and above.
The NLW will introduce a premium on top of the national minimum wage (NMW). Initially the premium is set at 70p above the current NMW although this will fall to a premium of 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.
John Cridland, Director-General of the CBI, commented:
'Small shops, hospitality firms and care providers are the businesses that will face real challenges in affording the National Living Wage.'
'Delivering higher wages can only be done sustainably by boosting productivity. Bringing politics into the Low Pay Commission is a bad idea.'