EEF Evidence to the Low Pay Commission

EEF has today submitted its evidence to the Low Pay Commission for the Commission’s next Report on the National Minimum Wage. A copy of EEF’s evidence is attached .

This evidence states that, as EEF has previously argued in evidence to the LPC, future increases in the NMW should be determined by a formula in order to provide employers with greater certainty about the direct and indirect impact of the NMW on their businesses. This will enable them to plan for the impact that these increases will inevitably have on their costs and remuneration arrangements.

The formula that EEF is recommending should be used for calculating future increases in the NMW is movements in basic rates of pay across the economy. This is as measured by the average level of pay settlements reached across the economy during the previous 12 months.

However, we have also stated in our evidence that the figure resulting from using this formula should be adjusted to take account of forthcoming legislative changes that will have a disproportionate impact on employers paying the NMW. These are the proposed increase in statutory annual holiday entitlement and the introduction of compulsory employer contributions for employees who decide to join the government’s proposed new pensions savings scheme.