Published: 30/04/2019 By Thomas AgyapongCompanies with employees must already be familiar with their obligations when it comes to the National Minimum Wage (NMW). Current legislation sets out the minimum hourly rates that staff must be paid, which varies from £4.35 to £8.21 depending on their age. It is vital companies comply with these requirements, as a failure to do so can result in tribunal claims and punitive action by HM Revenue and Customs.
On the other hand, there is no legal requirement to pay staff in accordance with the voluntary Real Living Wage (RLW) as this is merely a suggested hourly rate which has been constructed by Living Wage Foundation. The RLW is thought to be based on the true cost of living and has two rates of £10.55, for those working in London, and £9.00 across the rest of the UK.
Given that it is voluntary, companies are free to refuse their employees’ request to be paid in line with the RLW. There will be no requirement for the company to justify their decision, however, they may wish to explain if financial limitations are preventing them from being able to issue a pay rise at this time.