Fair Work and The Real Living Wage – what your business needs to know
The Scottish Government is committed to making Scotland a leading Fair Work Nation, driving success, wellbeing and prosperity for individuals, organisations and society. With many businesses in Scotland now paying the Real Living Wage, what are the benefits to your business and employees and how do you make the change?
What is Fair Work?
Fair work is work that offers all individuals an effective voice, opportunity, security, fulfilment and respect. It balances the rights and responsibilities of employers and workers and generates benefits for individuals, organisations and society.
The Scottish Government want everyone in Scotland to be able to access Fair Work by 2025. They want all sectors and industries to provide high quality and diverse workforces to drive success, wellbeing and prosperity.
Fair work practices include:
- providing a decent standard of living and income;
- offering security of contract, including hours and earnings; other entitlements including sick pay and pension;
- fostering an environment where workers’ views are actively sought, listened to and can make a difference, including through a stronger role for trade unions;
- giving opportunities for all to learn, develop and progress;
- creating a healthy and safe environment, where individuals’ wellbeing is actively supported;
- enabling people to have a good work-life balance;
- supporting people to feel valued and respected and that they have a sense of purpose in work and wider society;
- creating fair, diverse and inclusive workforces;
- promoting innovation and productivity.
You can find case studies, in-depth information and support on Fair Work on the Fair Work Convention website.
What is the Real Living Wage?
The Real Living Wage is a higher UK wage rate that is based on the cost of living. The current Real Living Wage is £10.90 which businesses across the country pay voluntarily to their workers and is independently calculated according to the cost of living, based on a basket of household goods and services.
It is higher than the government’s National Minimum Wage rates, and is one of the clearest ways a business can demonstrate that it adopts Fair Work practices.
Your business can become an accredited Real Living Wage Employer through The Living Wage Foundation. Accredited employers can display the Living Wage Employer Mark to recognise their commitment to the Living Wage, receive a listing on their website and often have their accreditation recognised in the media.
Scottish Government Grant Conditions
From the 1st of July 2023 organisations applying for public sector grants will need to pay at least the Real Living Wage and provide channels for staff to have a say in the workplace ( Scottish Government announcement 01/07/2023). This includes all business grants and funding from Midlothian Council and Business Gateway.
To qualify for public sector grants, businesses must pay all UK-based staff aged 16 and over, including apprentices, at least the Real Living Wage. Any UK-based workers who are not directly employed but are directly engaged in delivering the grant-funded activity, whether they be sub-contractors or agency staff, must also be paid at least the real Living Wage.
When applying for grants, businesses must show their Real Living Wage accreditation or be able to self-declare and provide evidence when requested of them paying the Real Living Wage to all employees over 16.
What are the benefits of Fair Work and the Real Living Wage to businesses?
Paying the Real Living Wage and offering high quality, fair jobs helps businesses to:
- recruit and retain staff;
- reduce absenteeism;
- increase productivity;
- improve the employer brand;
- secure funding.
93% of businesses say that Living Wage accreditation has improved their reputation (Living Wage Foundation).
What are the benefits of Fair Work and the Real Living Wage to workers?
Talented people are at the heart of every successful business. By creating conditions for workers to develop and utilise their skills, Fair Work can enable workers to play a full and active role – underpinning high productivity, performance and innovation and contributing to healthier, wealthier and more inclusive societies.
The real Living Wage allows employees:
- the opportunity to provide for their families and plan for the future. It can mean the difference between surviving and thriving;
- to feel valued and appreciated, making them more motivated and loyal to their employer;
- improved mental health and wellbeing;
- to have higher job satisfaction.
Local support available for your business
Midlothian Council’s Economic Development service, including Business Gateway Midlothian, can support you to ensure your business understands and meets the grant conditions around Fair Work and the Real Living Wage. Our Expert Help programme provides fully funded consultancy support to implement Fair Work into your business practices.