Retail news round-up on December 15, 2015: UK businesses to bear the brunt of living wage, and Sports Direct blasted for paying less than minimum wage.
UK businesses set to face more than £1bn in costs due to living wage
Government advisors have warned that the introduction of the compulsory National Living Wage in 2016 will have an effect on businesses in the UK by costing them more than £1bn.
The Regulatory Policy Committee (RPC), an independent body appointed by the government which verifies the costs and savings of proposed changes to businesses and civil society, predicts the change will cost employers £804.4m in extra wages and staff costs.
The RPC also said a further £234.3m of ‘spillover’ costs from keeping pay differentials will take it over £1bn.
Chancellor George Osborne announced in this year’s summer budget that workers above 25 will receive a minimum of £7.20 per hour.
Sports Direct under fire over minimum wage pay claims
Mike Ashley’s Sports Direct has received criticisms in the British parliament over claims that it has not been paying the minimum wage.
Nick Boles, the skills and equalities minister, told MPs that although no staff from the retailer had complained to HM Revenue and Customs, it could still take enforcement action.
"I don't care how famous an employer is, I don't care how well connected they are, I don't care frankly how much money they have made, they need to obey the law," Boles told the House of Commons.
"If they don't obey the law we will enforce the law, we will fine them and disqualify the directors if necessary."
Former shadow business secretary Chuka Umunna submitted an urgent question on the wage position at the retailer that led to the debate.
Umunna branded Sports Direct a “bad advert for British business and one with a culture of fear in the workplace” that we should not wish to see repeated elsewhere.