Government's Low Pay Commission remit to affect hospitality industry
The Low Pay Commission (LPC) has been instructed to recommend a new National Living Wage to take effect from April 2025.
The LPC has been advised that this rate should not fall below two-thirds of the UK median earnings for workers aged 21 and over, a recognised benchmark for low hourly pay.
The government also plans to adjust the age bands for adults. The LPC has been tasked with recommending a National Minimum Wage for 18 to 20-year-olds from April 2025, aiming to narrow the gap with the National Living Wage.
Additionally, the LPC will monitor and evaluate other National Minimum Wage rates, including those for under-18s and apprentices, and recommend increases from April 2025.
Kate Nicholls, chief executive of UKHospitality, commented: “Our staff are the lifeblood of hospitality and businesses are passionate about properly rewarding them for their crucial role.
“That’s why we agreed with the current remit of the Low Pay Commission to maintain wage rates at 66% of median earnings, which will see the Living Wage increase at twice the rate of inflation. After all, this is the basis upon which hospitality businesses have been planning and budgeting.
“However, making significant changes to the remit for 2025 now is disruptive and unhelpful. Evidence has been submitted to the LPC on a basis that is now out-of-date. It would have been far more pragmatic to wait and make these changes in 2026.
“With a new remit now in place, the LPC must recognise that the 20% increase to wage rates over the past two years clearly accounted for the cost of living. I would urge them not to recommend yet another significant increase, which would raise serious questions over affordability.”
On business rates, Nicholls added: “It’s also the case that business costs need to come down to offset rising wage costs, and that should start with the government fulfilling its manifesto commitment to reduce the burden of business rates on hospitality businesses, as well as reducing employer National Insurance Contributions.”
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