ECA is now accredited as a Real Living Wage Employer. We are proud to be part of this important movement, which aims to ensure that a good day’s work leads to a fair day’s pay.
But what is the Real Living Wage?
It's an independently calculated wage rate which aims to be reflect the actual cost of living.
Calculated by the Living Wage Foundation, it takes into account rental costs, council tax, shopping costs, and travel costs.
Companies are not legally obliged to sign up to the Real Living Wage but can become accredited Living Wage Employers if they choose to do so – and that's what we have done.
The new Real Living Wage rate for people working in London – announced earlier this week – is £10.75 per hour (up from £10.55); the new UK-wide rate is £9.30 per hour (up from £9). Accredited Living Wage Employers like ECA now have until 1 May 2020 to implement the new rates, not just for their own employees but also for contract staff working on their premises, such as cleaners and security personnel. The only exemption from the full Real Living Wage rate relates to employees undergoing a regulated apprenticeship.
The Real Living Wage is different from the National Living Wage, which is determined each year by the Low Pay Commission on behalf of the Government. This is because – despite its name – the National Living Wage is not calculated according to what employees and their families need to live.
Instead, the National Living Wage is based on a target set by former Chancellor of the Exchequer George Osborne to reach 60% of median earnings by 2020. The current rate is just £8.21 per hour. Under current forecasts for median earnings, this is likely to remain well below £9 per hour by 2020.
The Real Living Wage rates are higher because they are independently calculated based on what people need to get by. That's why the Living Wage Foundation encourages all employers to ensure their employees and contract staff earn a wage that meets the costs of living, not just the Government minimum.
A growing number of clients and main contractors are encouraging ECA members and other supply chain contractors to comply with the Real Living Wage. As such, this is just one of an increasing range of Social Value requirements that our members are having to consider adopting. In many cases, though, firms are becoming Living Wage Employers simply because they feel it is the right thing to do. More details can be found in the ECA guide to Social Value, available to members here.
ECA will be providing more specific information and guidance in future about the Real Living Wage and becoming a Living Wage Employer, based on further research and our own experience. In the meantime, as well as our own Social Value guidance (above), you can learn more by visiting the Living Wage Foundation website at https://www.livingwage.org.uk