German retail chain Lidl will become the first UK supermarket to pay the Living Wage.
The pay hike will equate to an average wage increase of £1,200 per year for about 9,000 Lidl employees, or just over half of the supermarket’s UK workforce. The increase is due this October, and means that Lidl employees across England, Scotland and Wales will receive a minimum of £8.20 per hour.
The Living Wage Foundation currently recommends a £7.85 minimum hourly rate (£9.15 for London), but they have confirmed that these rates will change in November. Lidl has already said that it will adjust its pay rates in accordance with the LWF.
Lidl’s pay rate is also higher than the government’s new mandatory National Living Wage (NLW), which is set at £7.25 per hour for workers aged over 25. This is due to come into effect in April 2016. The National Minimum Wage (NMW) will still apply to employees under 25. This is due to increase to £6.70 in October.
Ronny Gottschlich, CEO of Lidl UK said: “We recognise that every employee forms an integral part of team Lidl, and each individual’s contribution is valued.”
“It’s therefore only right that we show our commitment, in the same way that the team commit to the business and our customers each and every day, by ensuring a wage that supports the cost of living.”
The proposed NLW has come under criticism from some quarters since Chancellor George Osborn announced it as part of the Summer Budget. One of the most vocal critics has been former Sainsbury’s Chief Executive Justin King, who believes that a higher minimum wage will lead to job losses. Meanwhile the Trade Unions Congress (TUC) has expressed concern that businesses will employ more workers under the age of 25 rather than older workers who will be entitled to a higher hourly rate.
Lidl is the latest UK-wide business to adopt the Living Wage since IKEA’s announcement back in July. With more companies taking up the fair pay initiative and the forthcoming NLW regulations, it looks like wages are finally starting to catch up with the economic recovery.
