The state of the UK economy Developments in the labour market
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• Who National Living Wage (NLW) and NMW workers are – what their household status is, and the level of exposure they have had to the labour market effects of coronavirus and lockdown • The strength of the NLW labour market prior to coronavirus and lockdown – this section explores changes in employment over the period leading to lockdown and how employment and hours responded to lockdown restrictions. It also looks at the characteristics of furloughed workers • Younger workers affected by the age rates of the NMW and apprentices • How employers have responded to the NMW and NLW and the impacts on the economy • The prospects for the economy in the coming year, based on the forecasts and evidence that were available at the time • The rationale for the LPC’s recommendations
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New Low Pay Commission blog: What does the NLW have to do with the price of fish? 25 January 2021
The Low Pay Commission (LPC) is responsible for advising the government in relation to the National Living Wage (NLW) and the National Minimum Wage (NMW). It has published a new blog, which discusses what impact the NLW has had on businesses since its introduction back in 2016.
Some of the questions that are asked relate to whether companies have had to reduce employment, increase their prices or make any other changes to the way in which they operate since the introduction of the NLW.
Frontier Economics were commissioned in 2019 to explore these questions, and the findings subsequently influenced the LPC’s recommendations to the government. The findings were published in December 2020.
The research was divided into two sections – one which assessed the impact on businesses, and another that investigated the impact on prices.
The research highlighted the fact that, although the NLW has resulted in increased pay for a number of workers, this has not had any subsequent significant impact on businesses or consumers. Whilst it is recognised that employment growth has been slower in businesses that tend to pay the minimum wage, this is part of a longer-term trend and not directly attributable to increases in the NLW. There is evidence that shows that price rises occur in the months that the minimum wage is increased, but that it has a relatively small effect. Furthermore, the evidence demonstrates that increases in the NLW recommended by the LPC have not had any substantial negative impacts. The LPC recognises, however, that it will be more important than ever in the future to understand how firms are coping and how any potential further increases may affect them. The LPC will continue to research and converse with businesses to inform its recommendations to the government.
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Tweaks to the National Minimum Wage Manual 19 March 2021
HMRC has made some changes to the National Minimum Wage (NMW) Manual to include several amendments to how things are worded, along with an additional example relating to living accommodation.
The provision of accommodation, provision of living accommodation and legislative prescription have all been reworded. The reference to provision of a bed has been amended to sleeping facilities, and there has also been a rewording of when the accommodation offset applies. The CIPP Policy team’s interpretation of the changes is that employer-provided accommodation doesn’t need to be furnished or up to a high standard, but just needs to be liveable.
The Chartered Institute of Payroll Professionals
Payroll: need to know
cipp.org.uk
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