Capita has become the latest employer to withdraw from the ‘real’ Living Wage scheme after the recommended rate increased by 10% two years in a row.
The outsourcing company said that employees currently on the Living Wage, which is recommended by the Living Wage Foundation and takes the cost of living into account, will still be paid more than the national living wage, which is set to increase to £11.44 in April.
The Living Wage Foundation’s rate for 2023-24 is now £12.00 per hour outside London (up from £10.90 last year) and £13.15 per hour in London (up from £11.95). There are more than 14,000 Living Wage Foundation-accredited employers.
‘Real’ Living Wage
Capita said some employees will still receive rate if the contract they are working on obliges the organisation to pay it.
The news came just a week after BrewDog announced it had dropped out of the Living Wage scheme, stating it had to make “hard decisions” after making a trading loss in 2023.
A Capita spokesperson said: “Capita has reluctantly taken the difficult decision to withdraw from the Real Living Wage, following its second significant annual increase.
“Colleagues currently on the Real Living Wage will be paid more than the national living wage, and our lowest-paid employees will all receive an above-inflation pay rise. We remain committed to our people and will revisit this decision when appropriate, as part of our continuing review of our cost base.”
The Communication Workers’ Union (CWU), which primarily represents Capita workers on contracts with the BBC, Virgin Media O2 and Tesco Mobile, said it would consult members about balloting for industrial action over the decision.
It estimated that most employees could lose out on an extra £850 a year as a result of the decision.
A CWU spokesperson said: “It is astonishing that Capita have moved to slash the wages of hard-working employees during the worst cost-of-living crisis of the century. This callous choice will massively impact on the living standards of those who have guaranteed the company’s profitability in trying times.
“We urge Capita’s leadership to change its tune or face the potential of serious industrial disruption.”
Katherine Chapman, director of Living Wage Foundation, said: “We are disappointed that Capita has chosen to stop paying the real Living Wage. The independently calculated real Living Wage is the only UK wage rate based on the cost of living and it is voluntarily paid by over 14,000 organisations.
“Despite tough economic times, it’s been heartening to see record numbers of businesses join the movement. Over 3,000 new employers accredited in 2023 alone in recognition of the importance of ensuring that everyone who works for them has a decent standard of living, particularly as living costs remain high.”
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