General election halts national minimum wage 2020 announcement

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The timing of the general election may present real problems for employers with a 1 January pay review date.

In the normal course of events, the Low Pay Commission would present its recommendations for increasing the national minimum wage by the end of October, with the Government setting out its response and confirming any changes in the Budget mid-November.

As the Budget originally planned for November 2019 will not now take effect, there is no forum in which the Chancellor can set out the rates due to take effect in April 2020.

Again, in the normal course of events this would not be a problem – a government could equally well choose to make the announcement in some other way.

However, a politically contentious issue such as this is likely to fall under the “purdah” rules that govern ministerial and civil service conduct once a general election is announced. These rules are intended to ensure government continues but that ministers cannot use public resources for party advantage.

In effect, this means that there will be no announcement about new minimum wage rates until at least mid-December, or possibly not until January, once a new government takes office and the relevant minister has decided what to do with the Low Pay Commission’s recommendations.

And while employers with a 1 January pay review date might normally expect to have at least six weeks in which to ensure that any new rates will comply with the April uprating to the minimum wage, this time round they may have to set 2020 pay with no idea if their rates will be high enough come April of the same year.

One possibility is that the Low Pay Commission may still publish its report and recommendations as planned. Before the election was called, this would have happened in late November. However, it is not clear if this will go ahead, or if this might itself fall under the purdah rules.

If publication does go ahead, employers will at least have the opportunity to base any increase in pay rates on the Low Pay Commission’s recommendations to government. If not, they will be making decisions entirely in the dark.

3 Responses to General election halts national minimum wage 2020 announcement

  1. Avatar
    Adrian Lawrence 1 Nov 2019 at 7:38 pm #

    Given that the target was 60% of median wages, then the recommendation should be in line with that as 2020 is the last year to reach it.

  2. Avatar
    Steve Dengate 3 Nov 2019 at 7:35 am #

    With the delay in the announcement of the 2020 minimum wage how can companies expect to budget for their personnel costs for the coming year?
    Many industries due to the economic climate run on razor think margins and this unfortunately leads to many staff working on/around the minimum wage level.
    With historic rises over the past 3 years being in the region of 4-4.5% YoY, this is a notification businesses need sooner rather than later.

  3. Avatar
    William Proctor 7 Nov 2019 at 4:49 pm #

    Just as importantly, our clients are asking us for our annual charges for 2020 now, as they need to se their budgets. We do not know what to increase our charges by, and we have to give our clients 30 days notice. So for 1st Jan increases, we need to tell them by the end of this month. We have 700 clients, this takes time to organise, so we normally start the process at the beginning of November. This whole situation has left us, our staff and clients in total limbo.
    If we get our ‘guessed’ increase wrong, it will cost us high tens or possibly hundreds of thousands pounds.

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