Am I Legally Required To Pay The ‘Real Living Wage’?

It’s not unusual for your staff to ask for a pay rise.

Sometimes they’ve earned one, on other occasions they’ve worked hard and are due a reward.

However, what if they ask for a pay increase to the Real Living Wage?

Are you legally obliged to give them this pay rise?


National Minimum Wage

The National Minimum Wage is legislation that states the amount of pay, per hour, you as an employer must pay your staff.

The amount of pay per hour changes depending on the age of your staff member.

However paying the minimum relevant rate is your legal obligation.


National Living Wage

For anyone aged 25 and over, this legal requirement is called the National Living Wage.

If you don’t pay your staff the right wage you can wind up in big trouble from HMRC and many business owners opt to outsource their payroll to help with these changes.


Real Living Wage

The ‘Real Living Wage’ differs from the National Living Wage. This figure is not set by the Government.

The findings are produced by the Living Wage Foundation and they take into account studies that suggest the true living wage of people aged over 25 in the UK.

For those working in London the Real Living Wage is £10.55, for everyone outside of London it is £9.

Remember, the Real Living Wage is a suggested hourly rate that has been constructed by research and it is believed that it reflects the true cost of living in the UK.


Answer:

There is no legal requirement to pay your staff the ‘Real Living Wage’.

If an employee approaches you and demands to be paid the Real Living Wage, you are under no obligation to increase their pay.


So… What Should You Do?

However, just because you’re not legally obliged to pay the ‘Real Living Wage’ doesn’t mean that rejecting this request is always the best move to make.

It’s worth remembering that the Real Living Wage is the suggested hourly rate that research suggests reflects the true cost of living.

Your employees may well be asking for this pay rise because they can’t make ends meet.

Staff retention is an important factor to running a business, and pay is one of the best retention tools at your disposal.

If many members of staff come forward and make this request – turning them all down could really demoralise your team.

You are not legally obliged to pay an employee the ‘Real Living Wage’, however that doesn’t mean you shouldn’t consider doing it anyway.

 

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