14-20th November is Living Wage Week – a time to celebrate and raise awareness of a movement that’s helping to ensure people receive a fair and manageable wage.
We take a deep dive into the Real Living Wage.
Who are the Living Wage Foundation?
It’s a registered charity that was set-up to address the growing disparity in hourly rates compared with the cost of living.
Over 11,000 organisations have chosen to join the movement and accredited employers, which has seen more than £2 billion going back into the pockets of workers since the initiative started through the increased hourly rate.
As people across the UK tackle the challenges of rising energy bills and the weekly shop increasing, it’s now more important than ever to ensure colleagues are paid a reasonable wage that helps them live comfortably.
What is the Real Living Wage?
It’s a voluntary initiative that organisations choose to join, and there is a small cost involved to be a member.
Membership is subject to companies agreeing to make any necessary increases across their workforce, when the Real Living Wage hourly rate is reviewed each year.
The current Real Living Wage was announced in September - £10.90 per hour, and £11.95 in London.
Whilst the Government requires employers to pay the national living wage as a legal requirement, the Real Living Wage set by the foundation recognises that this limited amount is not enough for workers to live on, and for those working in London it is disproportional.
Many accredited employers choose to pay above and beyond the Real Living Wage set by the foundation, but to become accredited all workers must be paid this as a minimum.
What are the benefits of paying the Real Living Wage?
The foundation’s calculation is based each year on the cost of living, price of standard services and a cost of a basket of household goods. Ensuring a fair wage is paid, that employees can comfortably live off.
Accredited employers who sign up to the scheme also believe that a Real Living Wage should be able to accommodate emergencies – an unavoidable trip to the dentist or a new washing machine and plumber when the old one springs a leak.
Through the Real Living Wage 300,000 people have this reassurance, and know that the organisation they work for values them.
86% of accredited employers say becoming a member has improved the reputation of their business, and 75% say it has increased retention and motivation rates for their employees.
How can companies adopt the Real Living Wage?
Anyone interested in finding out more about the Real Living Wage are encouraged to get in touch with the foundation to register their interest.
The first step will be to review the hourly rate for all of your workforce and identify any people that may be paid under the current Real Living Wage hourly rate. People on structured training programmes such as Government recognised Apprenticeships, do not need to be included.
If you have any sub-contractors or self-employed workers that provide more than two hours of work to you over 8 consecutive weeks, then these will also need to be included in your pay calculations. Whilst you may put a plan in place to phase in the introduction of the Real Living Wage for these workers, they’ll need to be noted for future pay projections.
Organisations who pay colleagues on an hourly basis can also opt to become an accredited Living Hours Employer. This scheme ensures workers receive notice of upcoming shifts of at least 4 weeks, a right to a contract with their accurate working hours stated on it, and a minimum of 16 hours each week guaranteed. Helping to provide job security and a steady income.