Rise in minimum wage took many pubs by surprise

Many pubs were unaware of the 40p an hour rise in the minimum wage which came into effect this week.

Business organisations have criticised the Government for failing to properly inform employers of the increase, which came into effect on Monday (October 1).

A number of licensees contacted thePublican.com for information after staff asked about their entitlement to a pay increase when they arrived at work.

Stephen Alambritis, spokesman for the Federation of Small Businesses (FSB), said: "It will have caught some businesses already struggling with a raft of regulations, particularly pubs, by surprise. There was some concern about the way it was announced earlier in the year by the DTI rather than, as it should be, by the independent Low Pay Commission."

The onus was on the Government to ensure that employers knew about the increase, said Mr Alambritis. "You can't give something like this too much publicity," he added.

The FSB is also concerned about the size of the first increase in the minimum wage since it was introduced in April 1999, especially in light of the crisis many smaller outlets are facing due to the foot-and-mouth outbreak, poor weather over the last year and the US attacks.

"It will hit vulnerable businesses, such as village pubs, very hard. £3.70 to £4.10 an hour is a big jump, if you have even four or five staff. Pricing in pubs is sensitive, so licensees can't pass a pay increase on to customers in the same way as a grocery store, for example," he said.

Tony Payne, chief executive of the Federation of Licensed Victuallers Associations, said his members had received advanced warning through the organisation. He said: "We let our members know about the increase in our two most recent newsletters, as we do with all changes in legislation which affect them."

Steve Pyke, licensee of the Bay Horse in Huddersfield, said: "I know that many tenants and lessees are taken by surprise by this kind of unexpected financial cost. We were fortunate in that we've been working with a consultant to transfer the pub from managed to leasehold over the past few months, and it has made sure we knew about the rise."

The increase is part of a two-stage recommendation by the Low Pay Commission which has been accepted by the Government.

The October 2002 increase is conditional on what the Government calls "the continuation of favourable economic conditions".

The minimum wage rates are:​

For workers age 22 and over:​

For workers aged 18-21:​

Want more details on the changes? Our legal team summarise the law relating to the Natonal Minimum Wage in our essential guide.