Smaller businesses have been disproportionately affected by the national living wage in the past year, compared with their larger counterparts, according to an assessment by the Low Pay Commission.
The report shows that both the number of people and the number of hours worked have fallen over the last year in the smallest businesses. Regionally, overall employment has also fallen over the last year in the North East, North West, the East of England and Scotland.
ACS research into the impact of the national living wage has shown that 74% of convenience stores of all ownership types have had to reduce the number of staff hours in their business as a result of the £7.20 rate being introduced. Of those that have had to lay off staff altogether in the last 12 months, 76% reported that this was as a result of increased employment costs.
ACS chief executive James Lowman said: “Convenience stores of all sizes have faced significant increases in their employment costs over the last year through the introduction of the national living wage, two rises in the national minimum wage in 2016 and the phasing in of automatic pension enrolment.
“Our members are telling us that they are already having to make difficult decisions in their business as a result of rising employment costs, including reducing staff hours, taking on more hours in the business themselves and delaying investment plans. We will be engaging with the Low Pay Commission throughout 2017 to demonstrate the impact that continuing hikes in wage rates are having across our sector.”
The Government has set a target for the national living wage to reach 60% of median earnings by 2020. The commission’s projection for the rate of the national living wage in 2020 is currently £8.75 an hour, although this remains subject to change.
From April 1 this year, the national living wage will rise from £7.20 per hour for workers aged 25 and over to £7.50 an hour. There will also be increases in the rates of the national minimum wage. For full details of the rate changes, go to http://www.minimum-wage.co.uk/