National Living Wage - Change Ahead - 19th January 2016
Monica Or, columnist and Hospitality Consultant at Star Quality Hospitality Consultancy discusses how the National Living Wage can help with staff retention.
Published on: Mar 3, 2016
Transcripts - National Living Wage - Change Ahead - 19th January 2016
19 January 2016 by Monica Or on behalf of Star Quality Hospitality Consultancy
The National Living Wage – Change
Monica Or, columnist and Hospitality Consultant at Star Quality Hospitality
Consultancy discusses how the National Living Wage can help with staff retention.
The National Minimum Wage was introduced 16 years ago and every October we have come to
expect the increase in this and have had to adjust our payroll accordingly. The government has
now introduced the National Living Wage which will affect our payroll in the next couple of
In October 2015 the National Minimum Wage as set at:
Apprentice 16-18 years £3.30
Under 18 years £3.87
18 – 20 years £5.30
21 years and over £6.70
From 1st April 2016 all workers aged 25 and over are legally entitled to at least 7.20 per hour. So
if they are currently on the National Minimum Wage of £6.70 they will receive a 50p increase in
their hourly rate. This will affect your payroll cost and all salaries should be reviewed to ensure
that they are in line with this and there is parity amongst your staff.
Take these four steps to be ready for the change:
1) Check you know who is eligible in your organisation. Find out on GOV.Uk’s employment status
2) Take the appropriate payroll action.
3) Let your staff know about their new pay rate
4) Check your staff under 25 are earning at least the right rate of National Minimum Wage.
According to Big Hospitality employers surveyed said that almost a quarter of their workforce is
currently paid less than £7.20 and 39% are currently paid under £9 an hour which is the target
minimum wage set for 2020.
For hospitality businesses we also have to consider our Service Charge, which should be given to
our employees on top of their National Minimum / Living Wage rate. Most fair employers will
ensure that this is fairly and equally distributed amongst their staff and this includes their back of
house staff too, as everyone has a service role to play.
Some employees fear they may lose their jobs as employers may cut their staffing levels to save
costs. Other unscrupulous employers will try and save money by only employing under 25’s and
discriminate older workers in their recruitment process. Although these unsavoury practices will
end up negatively impacting your customer service and the reputation of our industry.
Now more than ever it is crucial to invest in your staff, not just by increasing their salary due to
the legislative requirements, but by training them to deliver the service your customers expect.
French bakery and café brand Paul, increased their wages in November 2015 ahead of the new
legislation – follow their strategy and show your commitment to your existing employees and
become an employer of choice. Keep hospitality a reputable industry to work in.
About Monica Or: As the founder of Star Quality Hospitality Consultancy, Monica specialises in working
operationally with the owner/managers of independent hotels and restaurants focusing on their business
structure and service delivery. She is the author of ‘Star Quality Hospitality – The Key to a Successful Hospitality
Business’ an Amazon best seller.