Businesses are expected to face increased staffing costs next spring, following the latest projection for the 2025 minimum rates of pay.
The Low Pay Commission (LPC), the independent public body that advises the Government on the national living wage, for those aged 21 and over, and the national minimum wage, for those of at least school leaving age, set out its latest estimates this month.
Its central estimate is that a living wage increase to £12.10 would be required to maintain the goal target.
“However, predicting this figure is challenging, so we project a range around our central estimate which runs from £11.82 to £12.39,” states the LPC.
The current living wage is £11.44 (up from £10.42 in 2023) and as of April this year, it applied to those aged 21 and over. Before 1 April 2024, the living wage was for those aged 23 and over.
A continual staggered narrowing of the gap between minimum rates for age groups and the living wage is likely in coming years, and the LPC is also mindful of not damaging employment prospects of groups affected.
British Equestrian Trade Association (BETA) executive director Claire Williams spoke to H&H about the current situation and how businesses have felt this year’s increase, which was particularly high.
In a recent survey, BETA members were asked if the new increased minimum wage levels would affect their businesses.
“Nearly 20% thought it might impact; 34% said no; and nearly half – 45% – were expecting to see a real impact on their business,” said Ms Williams.
“There was a range of reasons. I think the interesting one was a lot of employers who typically felt themselves to be paying well, as in well above the minimum wage, suddenly are finding themselves actually almost going backwards and getting closer to that minimum wage, which concerns them.”
She added that another impact is that the gap between the rates of pay for new staff and loyal, long-term employees therefore also narrows, which is another increased cost as employers seek to increase rates of pay respectively.
“The other concern is that it’s not just an increase in real wage bills – there are the other costs in a business that an increase to a salary gives,” she said, giving the examples of increased National Insurance and pension contributions “because everything is on percentages of that base salary”.
British Grooms’ Association (BGA) executive director Lucy Katan considered what the possible 2025 increases – and other areas highlighted in Labour’s manifesto – could mean for yards and grooms.
“The solution for [rises to minimum rates of pay] remains the same, which is I do believe that the working day needs to be tightened,” she told H&H. “There has to be more flexibility.”
Her calculations show a 50-hour week at a potential future minimum rate of £12.18 would mean an annual salary of £31,668, and a 37.5-hour week would pay £23,751 per annum – around £1,924 or £1,443 more than today, respectively.
She noted that phasing out the age bands in the minimum wage will have a “massive impact”, and also urged yards to take this opportunity to “clean up our industry” by taking responsibility and committing to good, legal practices.
She said that the Equestrian Employers Association is there for any employer looking for information and support. A total of 5,555 contracts and 844 staff handbooks have been created through its site, which leads her to question why some are still avoiding good employment practices.
“There are no loopholes, this is employment law,” she said, adding that the positive in all this is that “the industry has to change”.
“If our industry becomes a place of good employment, I can’t see how that is anything but a good thing for all involved.”
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