National Minimum Wage to impact food firms: FDF

By Matt Atherton contact

- Last updated on GMT

National Minimum Wage increased on October 1
National Minimum Wage increased on October 1

Related tags: National minimum wage, Minimum wage, National living wage

Food and drink manufacturers are preparing to manage the impact of the National Minimum Wage boost, which came into force on Saturday (October 1), said the Food and Drink Federation (FDF).

The organisation said the food and drink industry had coped with the effects of the rise in minimum wage in the past. But the impact of the most recent wage boost – which rise from £6.70 per hour to £6.95 for 21 to 24 year olds – would be exacerbated by the uncertainty surrounding the UK’s decision to leave the EU, said the federation.

An FDF spokesman told FoodManufacture.co.uk: “While the food and drink industry as a whole pays above the national minimum wage, manufacturers have always felt the indirect impact of such rises.

‘Manufacturers will face a further increase’

“Food and drink manufacturers will also face a further increase in the National Minimum Wage next April, as government looks to align the National Minimum Wage with the National Living Wage. This will be felt more acutely given the current economic uncertainty with the UK’s decision to exit the EU and what this may mean for future access to skilled labour.”

The rise in National Minimum Wage meant around 500,000 young workers received a pay rise. More than half of these workers saw their hourly wage rise 25p to £6.95.

The Department for Business, Energy & Industrial Strategy (BEIS) urged employers, including food and drink manufacturers, to make sure their payrolls were updated, in light of the boost in National Minimum Wage. An extra £7M was given to Her Majesty’s Revenue and Customs’ budget this year to find employers who fail to pay staff minimum wage.

‘Government continues to work with business’

Business secretary Greg Clark said: “The government is committed to ensuring the National Minimum Wage works for both employees and employers which is why we continue to work with business to create an environment in which they can thrive.

“Today’s changes will ensure low paid workers get their largest pay increase since the recession, and employers have an obligation to make sure their staffs are being paid appropriately.”

Meanwhile, BEIS named and shamed​ nearly 200 companies in August for failing to pay their staff minimum wage. Featured on the list were: Mr Moo’s Family Butchers, Peppermint UK, Foods Catering Academy and six other food service firms.

National Minimum Wage from October 1 2016:

  • 21-24 year olds wage increases 25p to £6.95/hour
  • 18-20 year olds wage increases 25p to £5.55/hour
  • 16-17 year olds wage increases 13p to £4/hour
  • Apprentice rate increases 10p to £3.40/hour
  • Accommodation offset increases 65p to £6/day

Related topics: Legal

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