Policy Report

Weighing up the wage floor: employer responses to the National Living Wage

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Weighing up the wage floor: employer responses to the National Living Wage

Published February 2016

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The report, produced with the Resolution Foundation, is based on a survey of 1,037 employers carried out in September 2015, which was followed by in-depth interviews with employers.  It shows that how employers expect to respond to the National Living Wage (NLW) varies greatly between small and large employers and across different sectors of the economy. The National Living Wage – the new legal wage floor for workers aged 25 and over, which comes into effect on 6 April – is set to benefit around 4.5 million employees. 

The report highlights a welcome desire by organisations to raise productivity, with 32 per cent of large employers expecting it to be part of their response. The report includes 14 case studies drawn from the most affected areas which provide a timely insight into the options and barriers which employers see open to them in responding to the NLW’s introduction and subsequent annual increases.

‘Around a third of employers (32%) think that cuts to corporation tax
and National Insurance will offset at least some of the extra wage costs.’

Content of the report

The context for the National Living Wage

The research

Conclusions and recommendations

Appendix: Employer case studies

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