Retailers are now required to pay employees aged 25 and over £7.20 per hour under the National Living Wage (NLW), which came into force today.
The chancellor announced the NLW as part of his 2015 Budget without consultation with the Low Pay Commission, and has signalled his intention for the rate to reach at least £9 per hour by 2020.
Retailer Conrad Davies, who owns four Spar stores in North Wales, said his staff would no longer receive overtime pay or Bank Holiday premiums as a result of the NLW, but staff aged 21 and above would also be paid £7.20 per hour. “They do as much work as the older staff,” he said. In addition staff will now have more responsibilities and will be required to work more flexible hours.
“It’ll cost us £50,000 a year,” added Conrad, who employs 130 people across the business which also includes six butchers, two Subways and a post office. “In my opinion the chancellor has done this to create inflation as prices will eventually go up as a result of the NLW.”
Association of Convenience Stores chief executive James Lowman said: “The introduction of the national living wage will have a serious impact on many of the 51,000 convenience stores in our sector. Over 60% of stores in the sector will look to reduce the number of staff hours in their business and delay investment plans, while for some already operating on the edge of profitability it will mean that they will have to either stop employing staff or close their business altogether. Plans to hike wages up to £9 per hour by 2020 will certainly close some stores. An escalating living wage will cost jobs and investment every single year.
“We support minimum wage rates, and agree that these may vary for different age groups. However, these rates should be determined by the independent Low Pay Commission, not by politicians. Our members work some of the longest hours in the country, and the national living wage will force them to work even longer to remain viable.”
ACS has estimated that in 2016, the introduction of the living wage at £7.20 per hour for workers over 25 will cost the sector in excess of £167m.
For workers under the age of 25, the National Minimum Wage (currently £6.70 per hour) still applies. Full details on the rates of National Living Wage and National Minimum Wage are available here: https://www.gov.uk/national-minimum-wage-rates