What happened to the nation’s pay rise?

Earlier this year, the government increased the minimum wage for those over 25. However, at the end of July, 30 office cleaners at HM Revenue & Customs went on strike because they had not received the pay rise they had been promised.

The reason? Their employer cut their working hours after the increase in minimum wage which left them with roughly the same amount as they had before April 2016. Essentially, their employer has offset wage increases by cutting employees hours. This practice is not illegal, but it could be regarded as unfair and ministers have heavily criticised those employers engaging in such tactics as not following the “spirit of the law”.

The minimum hourly rate for a person over the age of 25 was increased by 50p to £7.20 in April. Incremental increases are to continue until the wage it is worth is 60% of median earnings, which should take it over £9.

The issue in this particular case is that the cleaners are employed by a global outsourcing company with half a million employees. This company also has a supplier contract to another, which also has a similar contract with another – so there is a chain of employment and contracts where accountability is hard to determine. Other ways in which employers are cutting costs to their wage bill include retailers curbing premium pay rates on Sundays and bank holidays.

If you are an employer, you have an obligation to pay the minimum wage. But you might like to consider paying your staff the living wage, which is a recommendation of £8.25 an hour and £9.40 an hour for London.