Retailer Lidl has announced that it will pay 9,000 of its UK workers at least the full living wage, as recommended by The Living Wage Foundation, from October 2015.
This would mean an average pay increase of £1,200 a year for 53 per cent of its UK workforce, the German-owned supermarket said in a statement.
As the first British supermarket chain to embrace the higher pay campaign, Lidl UK staff will receive a minimum of £8.20 per hour across England, Scotland and Wales, and £9.35 per hour in London.
The Living Wage Foundation's current recommended hourly rate is £7.85, and £9.15 inside London, but the group confirmed it will announce a change to these rates in November.
Lidl’s rate is higher than the government's new mandatory National Living Wage (NLW), which, set at £7.20, will apply to workers aged 25 and over and will take effect in April 2016.
The National Minimum Wage (NMW) will continue to apply for those under 25 and is also increasing in October to £6.70.
Unions have argued that Lidl's announcement is evident of the fact that some businesses can afford to pay more, but others still warn that even the government's new lower National Living Wage will be damaging
The Union of Shop, Distributive and Allied Workers Union (Usdaw) welcomed the news, but added: “While it is good that Lidl have increased their pay rates we are concerned that Usdaw members working in Lidl say that they often have difficulty getting the hours when they need them.”
Other retail businesses have hit out at the government's NLW. Former Sainsbury’s chief executive Justin King has previously warned that the compulsory NLW - which will increase to £9 per hour by 2020 - will cause job losses.
Darren Topp, chief executive of BHS, said that the new NLW will make the struggling retailer's three-year turnaround plan "more difficult".
The Trades Union Congress (TUC) expressed concerns that employers who want to keep their labour costs low will employ more people under the age of 25 rather than older workers entitled to the NLW.
According to analysis by The Guardian, Sainsbury’s staff currently receive the best pay rate compared to rival supermarket chains. Tesco pays more per hour, but, along with Lidl, does not pay for staff breaks.
Ronny Gottschlich, chief executive of Lidl UK said the living wage represented an £9m investment by the organisation into its employees: “As a result, Lidl employees will be amongst the best paid in the supermarket sector, and that’s something I feel incredibly proud about,” he said.
The British Retail Consortium said many retailers were now looking closely at how they reward their employees, with the conclusions they reach being "as many and varied as the retail businesses themselves".
"Whatever approach retailers take to their total reward packages, the real key to raising more people out of low pay will rest in increasing productivity," its spokesperson said.
First Floor Offices, 11-23 Market St.
Tel: 01427 678660
HR and Accounts:
26/26a Hickman Street
Tel: 01427 678660
West 1, West Dock Street
Hull HU3 4HH
Tel: 01482 534 348
Hyde Park House, Cartwright Street
Newton, Hyde, Cheshire SK14 4EH
Tel: 0161 367 1214
2450 Regents Court The Crescent
Birmingham Business Park Solihull B37 7YE
Tel: 0121 69 59 290
4th Floor, 86-90 Paul Street
London EC2A 4NE
Tel: 0207 111 0958
Copyright © 2017 Stallard Kane Associates. All rights reserved.