Unlike NMW, the living wage is not statutory and therefore employers can choose not to pay this higher rate. The current rate for London is £8.80 and for the rest of the UK it is £7.65. The leaders of the main political parties support it however its uptake by employers is limited.
While this could be more costly to employers, this could be offset against the benefits reaped as a result. Employers who currently pay the living wage have seen various benefits such as increased productivity and quality of work (75%), increased retention rates (66%) as well as reduced numbers in workers being absent (25%). Whilst there has been talk that local and national government contracts will only be awarded to companies who pay the Living Wage, they seem to have backed away from this at least for the meantime.
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