CIPP response to consultation on the National Minimum Wage

01 October 2014

 

The CIPP has submitted its response to the annual consultation on the National Minimum Wage.

The response was produced from the results of a member survey and includes the results of a quick poll on the CIPP website for member opinion on whether the economic climate was now right to increase the NMW to match the UK Living Wage.

Summary of key findings

The overall trend was for low or no pay increases over the past year with very few expecting that this is likely to change over the coming 12-18 months.

Most, though not all, respondents claim to pay above the NMW rates and are therefore unaffected by any NMW increases.

The impacts of NMW rises have directly affected a small number of respondents; however others, though not paying NMW rates, claim the NMW rises affect employees who expect to receive similar percentage increases to those on NMW. In effect employees above NMW are not keeping pace in terms of their own pay differential.

84% of respondents said the NMW had not affected their decision whether to employ young people with most paying above the NMW rates.

Equally the Apprentice Rate has had very little impact on employers’ decisions on whether to recruit apprentices, with 84% once again saying this was not a factor.

Only 6% of respondents had experienced problems complying with the NMW.

An overwhelming majority suggested the rate for October 2015 should rise, at least in line with inflation, but many suggested it should match the Living Wage.

In a separate member poll, 86% of respondents to that poll agreed that the NMW rate should match the UK Living Wage rate.

Conclusion

Whilst increases to the NMW undoubtedly have an impact on certain industries such as the retail and care sectors, the majority of respondents to this consultation are not affected by increases to the NMW because they already pay above the minimum rates. Whilst the needs of these sectors, and others such as the hospitality industry, must be carefully considered, the results of the CIPP survey suggest that the NMW rules are simple to understand and do not cause problems for the majority of businesses.

Recommendations

Whilst being mindful of those sectors which are adversely affected by rate increases, the CIPP recommends that the Low Pay Commission explores the feasibility, and associated impacts on low paid sectors, of increasing the NMW rate to match the UK Living Wage rate.

Read the full response here