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.