Industry News

Chancellor warns businesses not to cut perks to compensate for National Living Wage

Chancellor George Osborne has issued a warning to businesses that choose to cut perks for their employees in order to compensate for the additional costs generated by the implementation of the National Living Wage (NLW).

A significant number of businesses have reduced overtime pay and other work-related benefits in order to fund the rise.

Commenting on the issue, the Chancellor stated: ‘We will enforce the letter of the law but we want companies to also live by the spirit of the law’.

Mr Osborne’s comments come following a Commons debate regarding the impact of the new NLW, which is set at a rate of 50p an hour more than the National Minimum Wage (NMW).

A motion urging the Government to ensure that low-paid workers are protected was also passed, following a warning that thousands have been left ‘significantly worse off’ as a result of the introduction of the NLW.

The new NLW came into effect on 1 April 2016 for workers aged 25 or over. Initially set at £7.20, the wage could potentially rise to over £9 an hour by 2020.