Legal ease: is your school ready for the national living wage?
LAST MONTH saw the launch of the national living wage (NLW). All workers aged 25 and over are now entitled to receive a rate of at least £7.20 per hour. Some critics have dismissed this as little more than a rebrand of the national minimum wage by the government, but the NLW is likely to have significant implications for schools.
The increase to £7.20 per hour from £6.70 per hour is only the tip of the iceberg: the commitment is to increase the NLW to at least £9 per hour by 2020. Increases to pay will also result in increased costs through associated pension contributions, national insurance and other costs. Schools will need to budget for this.
Schools will also need to consider how any increase to pay will impact on other pay grades, particularly those of staff paid just above the NLW. We are already aware of trade unions asking schools their plans in relation to maintaining pay differentials.
There is no legal requirement to implement increases across the board to maintain existing pay differentials. However, staff who perceive that they are undertaking more challenging work may feel that failure to increase their pay proportionately – so as to maintain the gap over those who have historically been paid less – is unfair.
The NLW may mean that schools find recruitment and retention more challenging, as a result of having to compete with other local businesses – particularly for support staff such as cleaning, catering and grounds staff.
Schools that fail to at least meet the NLW could face:
Employment tribunal or court claims from staff.
Penalties of up to £20,000 per worker (enforced by HMRC).
Potential criminal investigation.
Naming (and shaming) by the Department for Business, Innovation and Skills.
Receiving criticism for underpaying staff could be extremely damaging to a school’s reputation. Here are the steps you can take to avoid this:
Undertake an audit to identify any staff currently paid less than the NLW, or those likely to fall below the limit in the next few years.
Ensure that you are accurately recording the hours worked by staff for the purpose of calculating the working time, for which they need to be paid the NLW.
Consider your school’s approach to maintaining pay differentials for those grades above the NLW.
Ensure your school has assessed the impact of implementing the NLW on the school’s budget.
Review the school’s pay policy (if necessary, to reflect any changes as a result of the NLW).
Consider any communication strategy to respond to queries on the school’s approach to the NLW.
Alice Reeve is a partner at education law firm Veale Wasbrough Vizards