The Living wage in the UK – an appraisal

The UK government introduced a new Living wage of £7.20 per hour in April. Ian Hogg at specialist staff scheduling company looks at how it is affecting the industry.

The living wage only applies to over-25s
The minimum wage applies to workers under 25 – an apprentice gets £3.30 someone under 18 gets £3.85, a worker between 18 and 20 gets £5.30 while someone between 21 and 24 gets £6.70. The Living wage is the governments re-brand of the Minimum Wage for people over 25 and is currently £7.20 but will be increasing to £9.00 per hour by 2020. The Living Wage is essentially a different age threshold band of the Minimum Wage, which will end up 38% higher than the 2015 minimum wage.

The area of the gambling industry most affected is bingo
We provide systems for a number of operators but have been very busy with new customers since the Living Wage was announced because operators are finding this difficult to absorb.  This comes on top of compulsory auto enrolment for pensions and the apprentice levy and also attracts Employers National Insurance, so operators are looking at ways to manage their staff costs and mitigate the increase.

Systems are need to control costs
Systems are needed to more tightly manage staff costs. These systems use biometrics to ensure there are no ‘ghost hours’ but also monitor spend against budget to ensure there is no overspend. These systems are helping operators reduce the number of hours they pay for. The office for budget responsibility forecast, that ‘the living wage will give a pay rise to 1.3m workers this year, but it is expected to reduce hours worked by four million a week’.  

We have evidence that a bingo operator that changes from managing staff via spreadsheets a full blown staff scheduling system like ours including biometrics saved 12% of their staff costs – all by paying for less hours, which goes a long way to mitigating the Living Wage. All our bingo operators have bio metrics now and a lot of our bookmaker and AGC customers are adding it to their system to remove ghost hours and only pay for hours worked.

Also, recently a bingo operator introduced a new staff contract for all new joiners based on the minimum wage age thresholds. We changed our system so that on the employees 18th, 21st and 25th Birthdays they receive an automatic pay rise at midnight on the day they of their birthday. This new contract type works alongside the operators existing contract types and will help them manage their cost base as the replace leavers with staff on the new terms.

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