Skip To The Main Content
01 April 2017

Small businesses absorb National Living Wage as part of £2600 hike in employment costs

COMMENTING on today’s increase in the National Living Wage (NLW) to £7.50, Wilfred Mitchell, FSB NI Policy Chair of the Federation of Small Businesses (FSB), said:

“Due to the combined impact of today's increase in the National Living Wage, consequential National Insurance costs, and pensions auto-enrolment contributions, the average FSB employer will pay an extra £2,600 this year as a direct result of Government decisions.”

“Research revealed that almost three quarters (74%) of FSB members in Northern Ireland were already paying their staff at or above the NLW rate, before it was introduced. Our research also shows that most small business owners absorb the cost of wage increases by taking lower profits.

“We’re seeing increasing numbers of small business owners not paying themselves or stopping their own pension contributions to meet these new employment costs. Many already report that they are struggling to meet their growing payroll obligations.  This is particularly visible among those operating in sectors with tight margins, such as hospitality, retail and the care sectors.

“The Low Pay Commission should now be given flexibility in how to meet the Government’s NLW target. It’s a target that must be adjusted if it becomes clear that the economy cannot bear the pace of NLW increases.”

Read more about Wilfred Mitchell