Real Employment Law Advice

Why employers need to take action now for the ‘working poor’?

The working poor is a phrase used to describe those who are working but whose income is low and ultimately who struggle to pay for basic essentials like food and heating.

Wikipedia states ‘The working poor are working people whose incomes fall below a given poverty line due to low-income jobs and low familial household income.’

According to a study by the Institute for Public Policy Research the likelihood of those in working households being in poverty has risen from 13% in 1996-97 to 17% in 2019-20.

With the impact of covid and the increasing costs of living there is likely to be an even sharper increase in 2021-22.

There are of course impending changes to the National Minimum Wage and National Living Wage with increases from the 1st of April 2022 but as we know the rates of wages are not increasing in line with the rates of goods in the shops and in particular in relation to household bills and so there are going to be people who work for you inevitably who are going to be struggling in relation to their household bills and being able to put food on the table.

In organisations and businesses employers who are able should be looking to increase wages in line with the Real Living Wage.

The Real Living Wage is currently £9.90 for the UK and £11.05 for London and is calculated annually, ‘based on the best available evidence about living standards in London and the UK.’ In calculating the wage rate, everyday living costs are identified through public consensus. (Details taken from https://www.livingwage.org.uk/calculation )

This means that paying the Real Living Wage is one way in which employers can act to help their employees.

I appreciate that for some businesses and organisations and particularly those in the not for profit and charity sector, budgets may already be stretched, and it may be hard to increase wages, and in this situation, it is important to, at the very least, ensure that you have an awareness of the difficulty some employees may be experiencing at home.

All employers should consider taking the following steps:

  1. Signpost employees to resources available such as Martin Lewis Money Saving Expert website. https://www.moneysavingexpert.com/
  2. Put together money saving tips and hints and share with staff.
  3. Signpost to other resources available, such as food budgeting websites and menus.
  4. Direct to the Citizens Advice Budgeting Sheet https://www.citizensadvice.org.uk/debt-and-money/budgeting/budgeting/work-out-your-budget/
  5. Ensure managers are aware and mindful that there may be employees who are working for you who are struggling.
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The information contained in this blog post is provided for guidance and is a snapshot of the law at the time it is written. It is provided for your information only and should not be used as a substitute for obtaining legal advice that it specific to your particular circumstances.

The guidance should not be relied upon in any decision making process. It is strongly recommended that you seek advice before taking action.


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