April 1st 2016, is as every business owner knows the day that the minimum pay you can pay a member of staff over the age of 25, is £7.20 per hour. This is an increase of 50p per hour for the lowest paid.
Is the National Living Wage enforceable?
Yes, this is an a legally enforceable minimum level of pay, which is promoted by the Living Wage Foundation. It existed before the NLW was announced.
It is calculated by academics as the level of pay that would give workers sufficient for a basic standard of living.
At the moment, that amount is £8.25 an hour, and £9.40 an hour in London.
Everyone should paid a figure that let’s them live comfortably and rewards them for the hard work they do, however in an industry that is seeing bread prices reduced almost daily it could lead to job losses. I am not threatening this or advocating it but merely stating a fact. If the margin isn’t enough to balance the books then something has to go. Usually it’s the thing that costs the most i.e labour. But the problem doesn’t stop there as the job still has to be done and the bread still has to be delivered, so inevitably some bakers are going to close down, or downscale dramatically .
Our business also has it’s own problems in that our drivers work on a job and finish basis, so for example some drivers earn their pay in only 30 hours work and get the same pay as a driver who has a bigger route, or further to travel and earns the same. Now that longer hours driver is going to get a substantial pay rise because he has to earn £7.20 now per hour rather than £6.70.
What are the options?
We will probably have to reduce the hours of our driving staff by stopping daily deliveries to some of our customers who only buy a low volume. This will get the driver back earlier. Another idea is to stop the drivers chatting in the morning when they are loading up their vans and taking a long time to do this. We will have to make sure that they get loaded quicker, thus a saving on their hours.
Still it all amounts to just some of the challenges that you face if you want to run your own business.