And the National Living Wage for those over 21 in the UK is due to increase this year by a whopping 6.7%. It will rise from £11.44 to £12.21 an hour. This change is a small but important piece of a much larger effort to help low-paid workers. In Northern Ireland, as many as 170,000 people are projected to gain from these wage increases. The National Minimum Wage for younger workers, who currently receive even less than the adult minimum wage, is due a big boost. From today, workers between 18 and 20 will be paid £10 an hour, instead of £8.60, marking a whopping 16% increase! At the same time, the National Minimum Wage for under-18s will be raised by a massive 18%, going up from £6.40 to £7.55 per hour.
Employers all over the region should be prepared for substantial wage increases beginning April 6. On top of this, they need to navigate the increasing costs of National Insurance contributions as we speak. This double fiscal burden will undoubtedly create an enormous hardship for most enterprises. Organizations that are smaller in size, especially, might not have the capacity to absorb these increased costs.
Mount Charles, a company employing approximately 3,500 people in support services throughout the island of Ireland, is bracing for the financial impact of these new regulations. Gavin Annon, Chief Strategy Officer at Mount Charles, believes it’s local enterprise that will pay the price of these changes. As President of the Belfast Chamber, he makes no bones about it.
“This impact, between National Insurance and National Living Wage is roughly an extra £2.5m to us, so it’s significant,” – Gavin Annon
Annon pointed out that the majority of Belfast Chamber’s 600 members are small to medium-sized businesses. For these businesses, particularly small and medium-sized ones, avoiding or absorbing the heftier tab can be difficult. He stated that many of these organizations do not have “broad shoulders to carry this level of impact.”
As employers face these changes, Annon again stressed, it will require strategic management of resources.
“We have to be smarter with the resources that we deploy,” – Mr Annon
He recognized that the short-term impacts of these changes haven’t been fully felt.
“The rubber hasn’t hit the road on this yet – it’s only coming into place this week – so as and when you see that impact, I think it will change attitudes and behaviour in terms of what this actually looks like,” – Mr Annon