Workers will receive the UK Government’s national living wage of £11.44 an hour from April – below the £12 cost-of-living-based rate.
A letter sent to employees and published by trade union Unite Hospitality, said “hard decisions” had to be taken to maintain financial stability despite a “bumper” festive season.
The Aberdeenshire-based brewer said, going forward, staff would be hired at the statutory minimum wage rate, which stands at £10.42 an hour, rather than the higher rates set by the Living Wage Foundation that are paid at the moment. Existing staff will be unaffected by the move.
BrewDog staff over the age of 23 will receive a slight pay rise, but only from £10.90 to £11.44.
Pay rates for existing staff outside London will rise from £10.90 to £11.44 in April, while the pay of employees in London will be frozen at £11.95.
Bryan Simpson, hospitality organiser of Unite, told The BBC to withdraw the real living wage now, during the most acute cost-of-living crisis in a generation, is “outrageous”.
"We are already working with our BrewDog members across the country to collectively challenge this awful decision and force the senior management of the company to do the right thing by the workers who have made them millions,” he added.
The real living wage is independently calculated based on living standards in the UK and is separate from the government's national living wage.
BrewDog had been a Real Living Wage employer for almost a decade. When the company made the pledge to pay its UK staff the living wage in 2014, co-founder James Watt said it wanted to be a "wakeup call" for employers, especially in the hospitality industry.
"All of our staff will receive a wage that will afford them a good standard of living wherever they might be located," he said. "We want this to provide a call to arms for the industry to pick up its feet and set new standards."
A BrewDog spokesperson said: “As a result of the changes we’re making – and despite unprecedented challenges in the hospitality sector – our staff outside London will be getting a 4.95% increase in base pay, and crew currently working in London will be paid 4.5% above the National Living Wage.
“We have always been fully committed to doing the best we can for our people, and our benefits package is far more generous than the industry average.
“Last year we gave over £350,000 to our bars team via our unique profit share programme. Our team also benefits from a unique bonus scheme which sees all crew members receive an additional £1 an hour for the month for surpassing customer service standards.
“In addition, we offer signature benefits like “pawternity” leave and paid sabbaticals after five years of service.
“We are proud to be one of the Sunday Times Best Places to Work, and we were named a Top UK Employer by the UK Top Employers Institute.”
On Linkedin, BrewDog co-founder James Watt said investing in people was core to everything the operator did.
He said: “Since March 2022 we have increased the wages of our UK bar teams by a huge 20.4%, this is well ahead of most industries and almost all of our competitors.
“With the Real Living Wage increasing by an additional 10% in April 2024 we could not implement this on top of all the other amazing things we do for our people whilst still offering fantastic value for our customers at a time where they have less disposable income to spend."
He said hospitality is going through its toughest period in living memory, with there being more closures and job losses last year than ever before.
“Despite that we continue to invest way more in our people than our competitors. When you add up everything that we do for our people the value of the package is even more generous than Real Living Wage," added Watt.
He cited BrewDog schemes such as sharing its profits with bar team members, the chance for staff to earn an added £1 per hour through passing their mystery shop, sabbaticals, medical care and a refusal to use zero-hour contacts.
Watt continued: “It is important to note that nobody’s wages are going down and what we announced is actually a pay increase most of our people: our staff outside London will be getting a 4.95% increase in base pay, and crew currently working in London will be paid 4.5% above the National Living Wage.
“We remain fully committed to investing in our people, putting together packages which are well ahead of our competitors whilst doing all we can to drive exceptional customer experiences and long-term shareholder value for our community of over 220,000 Equity Punks.”
Unite Hospitality said it is working with BrewDog members across the country to challenge the operator’s decision.