Low Pay Commission warns that ‘emergency brake’ may need to be applied to national living wage as a result of coronavirus outbreak

Commission to monitor labour markets and any 'emerging risks', before making recommendations on 2021 rates in the autumn

The Low Pay Commission has warned that an 'emergency brake' may need to be applied to increases in the national living wage (NLW) as a result of the coronavirus outbreak

While in Budget 2020, the government set a target for the NLW to rise to two-thirds of median earnings by 2024, the Chair of the Low Pay Commission Bryan Sanderson said today -

'Under our new remit, the government asks us to monitor the labour market and the impacts of the NLW closely, advise on any emerging risks and - if the economic evidence warrants it - recommend that the government reviews its target or timeframe. This is what the government refers to as the ‘emergency brake’. The ongoing COVID-19 pandemic clearly represents a very challenging set of circumstances for workers and employers alike, and will require us to review whether the emergency brake is required when we next provide our advice to the government. This advice will be crucially dependent as always on the economic data we receive.'

NB - the Low Pay Commission also highlights that the NLW rises to £8.72 today, and confirms that it will make its recommendations to government on the 2021 national minimum wage rates in October this year.

For more information, including other rates of the national minimum wage from 1 April 2020, see National Living Wage increase raises income of low-paid workers from gov.uk