Over recent years, EEF has consistently argued in its evidence to the LPC that future increases in the NMW should be determined by a formula, based on movements in basic rates of pay across the economy. This approach would help manufacturers to plan for the impact that these increases will inevitably have on their costs and remuneration arrangements.
However, EEF considers that the figure resulting from using this formula will sometimes need to be adjusted by the LPC to take account of legislative changes that will have a disproportionate impact on employers paying the NMW. These include the proposed increase in statutory holiday entitlement and the introduction of compulsory employer contributions for employees who decide to join the government’s proposed new pensions saving scheme.
Commenting on this evidence to the LPC, David Yeandle, EEF Deputy Director of Employment Policy, said:
"Whilst most manufacturers have so far been able to live with recent increases in the National Minimum Wage, they continue to believe that EEF's recommended formula should be used to determine future increases. This would provide them with greater certainty about the future impact on their businesses which would then enable them to plan accordingly."
ENDS