Alison Robb: Will the national living wage have unintended consequences for employers?


As major decisions go, the choice to become a living wage employer last year was a relatively easy one. Paying the workforce – including contracted employees and apprentices – a fair wage that gives them the opportunity to live a happy and healthy life is simply the right thing to do.

Becoming the Living Wage Foundation’s first high street Principal Partner means our responsibilities do not stop with paying our employees a fair wage. A key aspect of this partnership is to encourage other employers to sign up and benefit from becoming a living wage employer.

The Chancellor’s announcement to increase the minimum wage for over-25s is undoubtedly a step in the right direction and we welcome it. In fact, we would argue that the introduction of the enhanced minimum wage, to which all employers must adhere, reduces the cost of going that extra step and becoming an accredited living wage employer.

Our concern, however, is for those who are below the age of 25 and apprentices. There are questions about whether over-25s who become apprentices will receive the enhanced minimum wage and this needs to be addressed, as paying apprentices the living wage makes the scheme a more viable option for older people looking to start a new career. We are one of the few employers that pay our apprentices the living wage, as opposed to the minimum apprentice wage, which is currently £2.85 per hour. 

It is clear the living wage campaign is gathering momentum: it is constantly in the news and the nation’s consumers are clearly supportive of it. Therefore, my question to employers that perhaps can afford to pay their employees a living wage, but have chosen not to do so, is: can they afford not to?

Alison Robb is group director at Nationwide Building Society