The National Living Wage – how it will affect your business
The National Living Wage has now come into force. Many of my Clients have asked me for advice on dealing with this change.
Basically, it means a £900 cash increase for a full-time worker on the current National Minimum Wage and by 2020 2.9 million workers are expected to benefit directly. In addition, it is expected to eradicate the gender pay gap for the lowest paid by 2020, which is great news for women.
The Government’s new National Living Wage entitles workers aged 25+ to £7.20 per hour. A surprising number of small businesses are still oblivious to today’s introduction of the changes and many firms have not made adequate provisions even though they have had plenty of time to plan for this change. The practicalities of business remain as constant as ever with unexpected expenses frequently arising. Many companies will find themselves with a reduced safety net of cash as a result of their increased payroll bill, meaning sudden costs or short term investments could prove difficult to manage.
It is crucial that small businesses are still in a position to meet these financial demands and, during this time of adjustment, all avenues of financial support should be explored.
It’s not just the increased wage bill affecting their bottom line but also the associated costs, such as national insurance, pension contributions and overtime pay, as well. SMEs need to make plans around the National Living Wage increase to avoid crippling fines and unexpected additional costs, which could spell doom for their business.
It’s not too late for SMEs to become compliant if they take action right away. So if you need more information on the Government’s new National Living Wage or would like to speak to me directly then call 02476 231000. Or if you would prefer, simply click below to enquire by our web contact form.
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