Businesses cannot afford to ignore the rise in the National Living Wage, a South Tyneside employment law expert has warned.
The headline National Living Wage rate rose to £7.50 per hour from the beginning of the month.
And Jayne Hart, from The HR Dept South Tyneside –based in Boldon’s Quadrus Business Centre – is warning employers should tread carefully when responding to the rises.
Businesses that fail to comply will face large fines and public naming and shaming.
The Living Wage was important for protecting society’s lowest paid, and paying staff well was an obvious tactic for recruiting and retaining good employees, she said.
But with businesses facing many pressures on staffing costs, some might be tempted to ignore the rise – or even take more extreme measures.
Dismissing staff purely because they qualify for the National Living Wage is not an option. Do this and your employees will be able to claim automatic unfair dismissal, as employment law protects against this.Jayne Hart
“Let’s start with what you cannot do,” said Jayne.
“Dismissing staff purely because they qualify for the National Living Wage is not an option. Do this and your employees will be able to claim automatic unfair dismissal, as employment law protects against this.
“Using gig workers should be treated with caution too. Businesses take on these ‘pretend self-employed workers’ and avoid paying NI contributions, wage obligations, employment rights, and auto enrolment.
“But this approach could still land them in court. Uber drivers took Uber to a tribunal and won, and there have been other high-profile cases too.
“Ignoring the minimum wage obligations is certainly not an option. Business owners could be fined up to £20,000 per worker plus wages due, as well as face a public naming and shaming.
“There are strategies businesses can employ legitimately though. The most positive way forward is to embrace the rises as part of a drive to increase productivity.
“Better-paid workers tend to be happier and more inclined to go the extra mile for their organisation. Make sure wage rises are well communicated along with any other benefits you offer.
“And if that won’t work, then you can consider redundancies. Tread carefully though. It must be the role that is made redundant, not the person. Get this wrong, and that is another sure fire route back to the courts.”