Pubs paying staff more than national living wage

The data from its labour management division S4Labour was drawn from a sample of more than 23,000 employees working across more than 100 hospitality organisations.

It found that the average hourly pay rate for over-25s working in hospitality was 90p higher than the NLW rate of £7.20. Outside of the capital, people were typically paid at a level much closer to the NLW at £7.29.

The research revealed the NLW had also affected the wages of under-25s, a demographic that it claims comprises of 89% of all hourly paid employees in the industry. The national average hourly wage for under-25s is £7.26, 6p above the NLW level and 31p higher than the legal minimum.

It estimated that the overall effect of the NLW has added an extra £900m to the industry’s total wage bill with the majority of the cost coming from increases to the wages of under-25s.

Alastair Scott, CEO of Catton Hospitality, which owns S4Labour and owns a number of pubs, said: “The two really interesting developments in the past year have been the fact that wages in London now far exceed the NLW, and that the NLW has had the effect of pulling the wages of the under-25s up across the country as well as London.

“This is partly because some operators have chosen to pay the NLW to all staff but also operators, such as ourselves, are happy to pay the NLW to under-25s if their performance deserves it.

“The cost to the industry keeps going up from our initial estimate of £370m last year. We now think it has cost the industry £900m, and we expect it to go up by another £400m as a consequence of the further rises this April if the differentials that we have seen over the past year are maintained.”