Councillors and committees
London Living Wage
- Meeting of Policy and Finance Committee, Thursday 2 July 2015 7:30 pm (Item 10.)
- View the background to item 10.
To provide information to the Committee to enable it to consider implementation of the London Living Wage
The Committee gave consideration to the implications of adopting the London Living Wage (LLW) for directly employed and agency staff in accordance with the request of Council at its meeting on 15 January.
Members noted that all but four of the 33 London boroughs, and a number of high profile public sector employers, now had a minimum pay rate at the LLW level of £9.15 per hour or higher, although 17 did not adhere to all parts of the commitment. The Council’s lowest hourly pay rate was £8.67, some 33% higher than the National Minimum Wage of £6.50 per hour. A number of initiatives to remove the lowest pay points and give pay awards weighted towards the lowest earners had brought recent relative improvement lowest rate of pay. However, some 272 staff, comprising 223 in schools, which were not obliged to follow the Council’s pay recommendations, and 49 others (15 of whom were in the Household Reuse and Recycling Centres) received less than the LLW.
The Committee took the view that it was not desirable to immediately increase basic pay rates to the LLW level. This would be costly, create contractual implications should the Council ever wish to change its policy, would include payments for overtime and to casual workers at the LLW level, which was not a requirement of the LLW, and technically complex to implement and operate given the need to maintain existing pay rates for schools which chose not to adopt the Living Wage.
As the rate of increase of the LLW was outside the Council’s influence, and as future local government pay settlements could further reduce or remove the difference from the London Living Wage, it was therefore agreed to achieve LLW pay rates by paying to staff within scope a one off individual supplement at the end of the current financial year, and in subsequent years if re-approved. The supplement would bring salary for basic hours worked up to the LLW in retrospect. It would be pensionable but non-contractual and not paid to otherwise eligible staff who had left the Council’s employment prior to 31st March. It would not apply to overtime hours or casual workers. This would allow the Council to commit to the current LLW level but have the flexibility to reconsider annually and to permit some schools to opt in to the arrangement and others not. Based on current pay scales the cost of implementation would be £49,535. The maximum cost for implementation in schools would amount to £42,627 although the decision to implement would, in each case, be for individual governing bodies. Costs of £58,568 in respect of the Household Waste and Recycling Centre were unlikely to be incurred because the service was due to be contracted out in October 2015 and staff transferred to the successful bidder.
It was agreed that Schools should be notified of the Council’s decision and encouraged to adopt the same approach.
RESOLVED that –
1) the Council adopts the London Living Wage from 1 April 2016, and implements it by a retrospective payment, the following March, of the difference between the London Living Wage then in force (pro rata), and normal basic pay;
2) overtime pay and payments to casual workers be excluded from the provisions set out in 1) above, in line with the expectations of the Living Wage Foundation;
3) school governing bodies be encouraged to take similar action; and
4) the policy be regularly reviewed in the light of local government pay settlements.
Voting – Unanimous
- London Living Wage Report, item 10. PDF 62 KB View as HTML (10./1) 25 KB
- Annex 1 - Costs of Implementation, item 10. PDF 57 KB