National Living Wage

We faced a similar problem in our charity in 2015, having become Living Wage employers (under the Foundation Living Wage) in 2014, only for the FLW in 2015 to leap up 5.9%. We calculated that it would take our entire organization's pay-rise budget just to accommodate the FLW rise for our lowest paid. As a result, we had to ditch the FLW and let ourselves drop below it.

Now, with the NLW being enforced in law, organizations that pay at NLW are having to play a careful game of bluff and counter-bluff with the Treasury in an attempt to anticipate what the next NLW uplift will be. However, the Conservative party does have a manifesto pledge to raise the NLW to £9.00 per hour by 2020, which should give us a sense of the speed and direction of increase. The consequence, if you want to provide equal pay rises across the board to your staff, is that you need to play that guessing game and budget accordingly for the next three years.

The alternative - OK, it's not really an alternative, but it's something you might like to think about doing *as well* - is to take a long, hard look at your pay structure. If there are senior roles with competitive salaries - especially if they are bespoke to individuals rather than based on a job evaluation of any sort - then you may have to negotiate some sort of pay harmonization and freeze on senior salaries in order to ensure enough in the budget for the next three years to meet the salary rises of your lowest paid.

For organizations like charities, that are built on compassion and which often have cultures of going the extra mile and doing the right thing, whatever the cost, it can be hard to stare inevitable cut-backs and potential redundancies in the face. But you are better off starting now (or, y'know, two years ago when we knew this was going to happen).

Fortunately, this also gives you an "out" for any individual employees or employee groups muttering about parity. The answer "in the light of the current economy, we are conducting a broad-spectrum review of how we meet the demands of the law and the expectations of employees most effectively and your concerns will be addressed in full by this process in due course" tends to shut people up.

We faced a similar problem in our charity in 2015, having become Living Wage employers (under the Foundation Living Wage) in 2014, only for the FLW in 2015 to leap up 5.9%. We calculated that it would take our entire organization's pay-rise budget just to accommodate the FLW rise for our lowest paid. As a result, we had to ditch the FLW and let ourselves drop below it.

Now, with the NLW being enforced in law, organizations that pay at NLW are having to play a careful game of bluff and counter-bluff with the Treasury in an attempt to anticipate what the next NLW uplift will be. However, the Conservative party does have a manifesto pledge to raise the NLW to £9.00 per hour by 2020, which should give us a sense of the speed and direction of increase. The consequence, if you want to provide equal pay rises across the board to your staff, is that you need to play that guessing game and budget accordingly for the next three years.

The alternative - OK, it's not really an alternative, but it's something you might like to think about doing *as well* - is to take a long, hard look at your pay structure. If there are senior roles with competitive salaries - especially if they are bespoke to individuals rather than based on a job evaluation of any sort - then you may have to negotiate some sort of pay harmonization and freeze on senior salaries in order to ensure enough in the budget for the next three years to meet the salary rises of your lowest paid.

For organizations like charities, that are built on compassion and which often have cultures of going the extra mile and doing the right thing, whatever the cost, it can be hard to stare inevitable cut-backs and potential redundancies in the face. But you are better off starting now (or, y'know, two years ago when we knew this was going to happen).

Fortunately, this also gives you an "out" for any individual employees or employee groups muttering about parity. The answer "in the light of the current economy, we are conducting a broad-spectrum review of how we meet the demands of the law and the expectations of employees most effectively and your concerns will be addressed in full by this process in due course" tends to shut people up.