Major firms that employ over 11,000 people are expected to face a big bill when the Living Wage rises start to come into force. A new survey by PricewaterhouseCoopers has found that companies expect to pay an extra £1.6 million on average in 2016, and up to £11 million more by 2020.
The large increases mean that companies are having to start contemplating now where the extra money will come from. According to the survey organisations that currently have a large number of employees earning below £7.20 an hour will typically see their wage bill rise by £2.3 million in 2016 and £15 million by 2020. This will likely involve large chunks of the retail market.
John Harding, employment tax partner at PwC commented on the survey’s findings: “Given the timetable of proposed increases, even those employers currently paying above £7.20 an hour need to be wary of complacency. Employers who are able to quickly adapt to these changes and embrace them are most likely to thrive as they will be best positioned to attract and retain talent.”