Businesses’ payroll bill to soar by £300m as London living wage increases
Payroll costs in the capital are set to soar by over £300m as the London living wage increases by a tenth.
Businesses signed up to the voluntary scheme will see their salary expenditure go up by £304,200,000 after the rate jumps from £11.95 an hour to £13.15 for 130,000 employees.
Firms accredited include half the FTSE 100 companies, such as insurer Aviva and fashion house Burberry, as well as Brentford FC, venue the Royal Albert Hall and retailer Lush.
Mayor Sadiq Khan said while the news meant “a welcome pay rise for more than 130,000 Londoners” it was also “vital” to see “an increase in government support, especially for small and micro businesses, for whom paying a London living wage can be a challenge”.
But he added: “I am proud that now more than 3,500 London employers have joined me in recognising the importance and benefits of paying hard working Londoners a fair wage.”
While Muniya Barua, Business LDN deputy chief, said there was a “clear business case” for firms who could afford it to pay the living wage “especially at a time of skills shortages”.
She told City PM: “Not only does it help the lowest paid in society but it also boosts retention and recruitment of talent, giving firms a competitive edge over their rivals.”
And James Watkins, head of Policy at the London Chamber of Commerce and Industry (LCCI) said given the cost of living crisis, businesses realised “the significance of keeping staff motivated and enthused during such difficult circumstances”.
He added: “A 10 per cent increase in the London living wage will empower our workforce by a great magnitude [more] than dissuading businesses from joining in. Government must ease cost pressures and bring down inflation for London businesses to reap the greatest rewards of this well-thought initiative.”
City Hall is also planning to give staff a minimum of 16 hours’ work a week and a month’s notice of shifts, in a move to tackle insecure work and become a ‘living hours’ employer.
Workers’ new salary, based on a 37.5-hour work week, will now be at least £25,642.5 annually – a 10 per cent bump, or £2,304 more, than the previous amount of £23,302.5.
Campaigners say the movement creates a “more motivated and engaged workforce”, while it comes as the government is making efforts to get more Brits back into the workforce in a bid to turbocharge growth in the sluggish UK economy.
Small businesses who choose to pay workers the London living wage include Dusty Knuckle Bakery, Greenwich Pantry and Rosslyn Coffee.
Graham Gilmore, London Stadium CEO, a London living wage employer, said: “Alongside all other employers at our venue and many across Queen Elizabeth Olympic Park, we are committed to supporting all casual and permanent staff at a time when it matters most.”