Lidl leads way on Living Wage implementation in UK

Lidl has become the first UK supermarket company to introduce a minimum wage – but it is based on the unenforceable rate recommended by the independent Living Wage Foundation, and is considerably higher than the figure being imposed by the government next year.

From this month the German-owned discount group, which has about 10,000 stores in 27 European countries, will pay £8.20 ($12.80, €11.20) an hour in England, Scotland and Wales and £9.35 in London.

The National Living Wage, fixed by the government, will be £7.20 for over-25s from April. The minimum advised by the foundation, a group of more than 1,300 employers, including the Aviva financial group and the food producer Nestlé, is £7.85, rising to £9.15 in London.

At present Lidl pays £7.30 in England, Scotland and Wales and £8.03 in London, already more than the rate that will be required by the government.

Another increase may be on the way. If the foundation raises its recommended minimum in its annual announcement next month, Lidl will adjust rates accordingly.

The company estimates this month’s increase will on average add £1,200 ($1,860, €1,650) a year to a Lidl employee’s pay.
The increase does not apply to Northern Ireland employees, but Lidl explains that their pay rose in August in line with the proposed living wage for the region.

Rhys Moore, the foundation’s director, said: “We are thrilled. We’ve been working with and trying to persuade the retail sector to pay the living wage rates rather than National Minimum Wage [now the National Living Wage]. None of the big four supermarkets currently pay the living wage rates, and the British Retail Consortium are very behind the curve on this.”

Roseanna Cunningham, the Scottish government’s fair work secretary, welcomed the decision: “Paying the living wage will have a significant effect on the lives of hundreds of staff in Scotland.”

Richard Perks, retail director of the market research consultancy Mintel, predicted that the big four would have to hike prices to pay the increases as they are losing market share.

The Asda, Morrisons, Sainsbury and Tesco groups all pointed out that, unlike Lidl, they pay for work breaks.

Other hourly rates, outside London, are: £8.15 at Aldi, £7.39 at Tesco, £7.36 at Sainsbury and £7 at Asda.

In August David Cameron, the UK prime minister, warned that employers failing to pay the government’s National Living Wage could be fined up to £20,000.