Good Business Charter real living wage feature image

Real living wage

The GBC requires all employers to pay directly employed staff and regular contracted staff the real living wage as set out by the Living Wage Foundation.

What it is

The real living wage is a UK wage rate that is voluntarily paid by UK businesses who believe their staff deserve a fair day’s pay for a hard day’s work.

In 2016 the government introduced the National Living Wage. This is not a living wage as it isn’t calculated based on actual living costs.

The current real living wage (as of November 2020) is £9.50 across the UK and £10.85 in London.

Why it matters

Low paid workers who receive the real living wage find they do not need to worry about affording the basics, and can even potentially save a little. Together with the Living Wage Foundation, we believe it is fair pay for hard work.

The Living Wage Foundation reports that living wage employers have found that being accredited improves the reputation of their businesses and differentiates them from others in the industry.

They have found that it increases motivation and retention rates for employees. It also improves relations between managers and their staff.

Regularly contracted workers

Regularly contracted workers are defined as those who work regularly, for 2 hours or more a week, for 8 or more consecutive weeks a year.  We believe it is really important to include regularly contracted workers in this requirement to avoid the risk that companies paying real living wage end up contracting out more work because it is cheaper when the only reason this is the case is because wages are below the real living wage.  The most common roles where this can occur are cleaners, drivers and security guards.

(NB. A small business may have contracted cleaners through a third party, that clean an entire building, so in this situation the wages should be topped up when they clean your offices to ensure you are compliant with this requirement).

Self-certification

To receive Good Business Charter accreditation, organisations will be asked if they are accredited with the Living Wage Foundation or if they currently pay all directly employed staff and regularly contracted staff the real living wage. 

If they are a larger organisation (with over 50 employees) and are not currently a Living Wage Employer or paying real living wage to all directly employed staff and regularly contracted workers, they will be asked to commit to a mutually agreed timescale to get to this level. 

Although signatories to the real living wage commitment will be entitled to use the GBC logo and will be accredited by them, the LWF logo will only be allowed to be used if an organisation completes the process for accreditation with the LWF. 

For more information please see https://www.livingwage.org.uk/

 

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