The recent introduction of the National Living Wage has already forced many UK car dealerships to consider huge cuts to employment benefits, according to the National Franchised Dealers Association (NFDA).
The National Living Wage, which was introduced in early April this year, saw the hourly wage for those aged 25 and over rising to £7.20 from the previous rate of £6.75. Chancellor George Osborne said during his Budget speech that the National Living Wage was to “keep moving us from a low wage, high tax, high welfare economy; to the higher wage, lower tax, lower welfare country we intend to create.”
While it’s important for car dealerships to be aware of their bottom line, they shouldn't’t neglect the importance of making sure they are adequately covered. As part of this process, all car dealerships should ensure they regularly update their motor trade insurance and their road risks insurance.
According to the NFDA, several car dealerships have already expressed concerns regarding the National Living Wage. They are now reportedly looking into ways to drastically cut their wage bills by reducing overtime, bonuses and other employee benefits. This is something about which the NFDA has expressed grave doubts for the industry as a whole.
Sue Robinson, the director of the NFDA, commented on the recent findings: “The NFDA is concerned with the new National Living Wage and the impacts that it might have on businesses.
“Several employers have already raised concerns and are now looking for other ways to cut wage bills, including reducing overtime and bonuses, and cutting employee benefits.
“We do believe that employees must be properly rewarded, and it is concerning that businesses looking for ways to counterbalance this rise in costs can resort to job losses or reduce staff working hours.”