NHBF calls for minimum and living wage restraint as salons face a second rate rise in a year

Rising costs and an increasingly uncertain economic outlook mean any increases in the National Minimum Wage and National Living Wage next year must be done with care, the NHBF has emphasised in its latest evidence to the Low Pay Commission.

National Minimum Wages rates are already going up this year on 1 October, and are almost certain to rise for the second time within a year next April, alongside the National Living Wage. The government is aligning the timing of both wage rates so from April 2017 both will rise at the same time.

The NHBF has warned that small and micro-businesses are having to find the money to pay for staff pensions for the first time under pensions auto-enrolment. New funding mechanisms for apprenticeships, yet to be confirmed for non-levy paying small businesses, and rising business rates are all putting salons under financial pressure. The uncertain economic climate following the Brexit vote is also worrying many salons and barbershops.

The NHBF’s feedback is that most salons and barbershops support the introduction this year of the new £7.20-an-hour National Living Wage for over-25s. Most are already paying their over-25s this rate or more, or they have successfully passed the increase on to clients. But they are worried about the size and speed of future rate rises as the government has set a target which will see the National Living Wage increase to £9 an hour by 2020.

NHBF chief executive Hilary Hall said:

“The high street remains deeply competitive, so if consumer spending and confidence is reduced by the uncertain economic outlook this will reduce the ability of salons to pass on future wage rises to clients through increased prices. 
“Salons are telling us that, if minimum and living wage rates continue to rise sharply, they may be forced to freeze recruitment, reduce staff hours, put expansion plans on hold or even lay off staff.

We therefore urge the Low Pay Commission to reflect this in its recommendations to government, and we urge the new chancellor Philip Hammond to keep what will be the second National Minimum Wage rate rise in a year to an absolute minimum.”

For more information regarding NMW and NLW rates, please view the following document.