The Living Wage Foundation announced new living wage rates today, bringing the London living wage to over £10 for the first time. What exactly is the difference between this living wage and the national minimum wage?
Since April 2016, the national living wage has applied to workers aged 25 or over – this is compulsory and is essentially a premium on top of the national minimum wage for workers in that age group. It is currently £7.50 per hour.
Separately, there is also a voluntary living wage, promoted by the Living Wage Foundation. New rates were announced today as £8.75 across the UK and £10.20 in London. The previous rates were £8.45 and £9.75 respectively.
The Living Wage Foundation promotes their living wage as the minimum people need to meet the real costs of living, and encourages employers to pay at least that rate. Businesses do not have to pay it (unless, for example, they have agreed to do so as part of a tender bid) but many choose to do so: over 3,500 across the UK (around 1,000 in Scotland) have signed up to the scheme with details listed on the Living Wage Foundation website. It is possible to become accredited as a Living Wage employer.
The Scottish Government’s Public Sector Pay Policy for Staff Pay Remits states that every worker whose pay is controlled directly by the Scottish Government will receive at least the ‘Scottish living wage’, which is based on the rate set by the Living Wage Foundation. Public bodies are also encouraged to become Accredited Living Wage employers.