The new enhanced rate of £7.20 per hour comes into force tomorrow (1 April) with many operators warning it will lead to cuts in jobs and staff hours, as well as a greater workload for hosts.
The poll reveals a lack of clarity among licensees when it comes to the new policy, with one in 10 believing that all staff, regardless of age, are entitled to the new rate. The NLW only applies to workers aged 25 and over. The vast majority of licensees identified the new NLW rate as £7.20 per hour, but about one in seven gave an alternative figure — the majority of those thinking it is a higher hourly rate.
Somewhat worryingly, only seven in 10 respondents said their business was ready for the NLW, despite having months to prepare since the Chancellor George Osborne announced the policy in July last year.
National Living Wage
* 56% of those surveyed said they are either cutting jobs or staff hours, and just under half will be increasing their own hours
* 63% said the new national living wage will have a 'significant' or huge impact on their business
* Four in 10 expect to pass on the costs of higher wages on to customers
Licensees were asked what steps they are taking to deal with the impact of the NLW, and were able to select from a number of options. More than half (56%) said they are either cutting jobs or staff hours. Just under half (47%) will be increasing their own working hours.
Almost one third (31%) said they would stop employing workers aged over 25 — surely an unintended consequence of the new legislation. Other popular choices were better labour scheduling (27%) and increasing staff productivity (21%). One in eight respondents said they already pay staff above the NLW rate so would be unaffected.
About four in 10 licensees said they plan on passing the increased costs on to customers, with about a quarter undecided. In terms of the long-term impact on the sector, an overwhelming majority thought the NLW — which is set to top £9 per hour by 2020 — will lead to pub closures and just one in six licensees think it will improve staff retention and recruitment.
Further calls for VAT cuts
Readers also had strong views on what the Government should do to help the trade with the additional costs associated with the NLW. The majority felt VAT should be cut, with others calling for assistance on business rates and employment taxes, as well as action to tackle cheap alcohol availability at supermarkets.
In terms of overall impact of the NLW on their businesses, almost two thirds (63%) of licensees claimed it will be either ‘significant’ or ‘huge’, demonstrating how much of a challenge many will find it to absorb the additional operating costs.
PMA editor Ed Bedington said: “It’s clear to see from our survey that there remains a great deal of concern and confusion surrounding the arrival of the national living wage, and its worrying to see that a large number of operators are seeking to cut jobs or hours in response.
“We need to work together as an industry to absorb this added cost in as positive a way as we possibly can. We can’t afford to reinforce perceptions that the trade is poorly paid and not a good career option.”
The online poll, conducted throughout March, was completed by a self-selecting sample of licensees.