Larger companies that change workers’ terms and conditions in order to offset the cost of the new national living wage could soon face pressure from the government to change their position. One household name employer has already been approached by a government minister and other interventions could follow, after Nick Boles, the Minister for Skills, said yesterday that ‘for larger employers there is simply no excuse for trying to evade the effect of the national living wage by cutting other benefits and premiums.’ Inviting fellow MPs to refer to BIS ministers ‘any case of a company that seems to be trying to evade the spirit of the legislation in an unreasonable way’, he promised to ‘use the full force of our office…to put pressure on those companies to live up … to their moral obligations…’.

The government intervention follows a number of news reports over recent weeks that have been critical of employers who have made changes to workers’ terms and conditions in response to the increase in the minimum wage for older workers. Firms contemplating such steps need to be alert to the risk of government and media scrutiny and be prepared to explain and justify their actions if challenged.