It was announced with a splash of publicity and hopes that it would be met with enthusiasm from all. Since the 1st of April, a new National Living Wage has made it compulsory for companies to pay their staff at least £7.20 an hour.
While many people have benefited from the changes, plenty have ended up worse too. This is because many companies are trying to make up for the increase in wage costs by cutting pay in other 
areas.
Problems under the surface
First of all, the Living Wage is only applicable to over 25s so two people doing the same job with a few months difference in age will be earning different wages.
For those who are set to receive the new wage, many have lost out in other areas. Some companies are going after Sunday and bank holiday pay, cutting pay for unsociable hours that many people rely on. They’ve also been taking away bonuses, staff discounts and free food. In some cases, under 25s have seen their wages cut to increase the wages of the over 25s who somehow need more money to live on. There are also fears that the new wage could lead companies to exclusively seek out younger workers in order to save on wage expenses.
B&Q is one of the many companies cutting Sunday and bank holiday pay as well as bonuses. Some staff will see their take home pay drop by 30%. After 136,000 people signed an online petition against this, B&Q have announced that staff who lose out will be compensated over the next two years.
Other companies doing the same are Wilko, Waitrose and Tesco. Caffé Nero, Zizzi, Asda and John Lewis have also made changes to free food perks.
Tesco has changed its Sunday pay from double-time to time-and-a-half. Special pay for night shifts used to apply to hours worked between 10pm and 6am. Now they have now changed to between midnight and 6am. Though about 85% of staff are expected to be better off under the new Living Wage, anyone who misses out will be given a lump sum of 18 months difference in pay.
This is a company that pays its CEO £1.25 million basic salary, not including the bonuses and the initial payment of £4 million when he agreed to take over from his predecessor.
Government response
George Osbourne has claimed that companies who cut pay are not acting within the ‘spirit of the law’ and should ‘abide by their responsibilities’.
With the much publicised ‘Britain deserves a pay rise’, Osbourne’s Budget is thought to have been undermined by these companies. This also comes after a £151bn cut in corporation tax to help pay for the new minimum wage.
Increases in bosses’ pay
On the other side of the spectrum, company bosses have seen consistent pay rises, often despite falling profits. Chief executive of BP, Bob Dudley received £14 million in the same year that the company made the biggest loses in its financial history, costing thousands of jobs and freezes in pay. Nearly 60% of shareholders voted against this pay package.
As of 2014, FTSE 100 bosses earn an average 183 times more than the average UK worker. This has increased from 2010 where they earned an average of 160 times more. The salary of the average FTSE 100 boss is £4.96 million, an increase from £4.12m in 2013. The salary of the average UK worker is currently at £27,000. Wage growth for UK workers continues to be slow and attempts to address this have been largely met with resistance.