The trade is still looking to cushion the blow dealt by implementation of the National Living Wage earlier this year, with its potential impact on the bottom line.
You may consider one solution to cutting your wage bill is to employ only under 25s – who are not entitled to the living wage. If this is a serious thought, then you should take heed of the pitfalls, particularly as this could put you at risk of age discrimination.
Points you should consider:
Age discrimination is prohibited by the Equality Act 2010. This means discrimination against anyone because of their actual or perceived age, whether directly or indirectly.
Advertising for young staff – Advertising for, or actively recruiting, only under 25s would be direct age discrimination. Older applicants who were turned down because of their age would be able to bring an Employment Tribunal claim against you for age discrimination.
Application forms – You should not include age and date of birth on application forms so as not to be seen to be discriminating – although you would be legitimately able to require anyone applying for a bar job to confirm that they are old enough to serve alcohol or require supervision as this is a legal requirement.
Dismissing older staff – If you dismiss workers who are over 25, or decide not to give them a promotion or extra hours because of their age, this would also be age discrimination.
Justification – Failing to hire someone who is over 25, or dismissing or failing to promote them in order to avoid paying the NLW, might be a business need and an economic efficiency – but it is unlikely to be a “proportionate means of achieving a legitimate aim” and therefore a justification that a Court would accept.
Different rates of pay for different ages
The National Minimum and Living Wage bands seem directly discriminatory but they are subject to an exemption in the Equality Act. There is a further exemption which means you can pay different rates of pay as long as you base your pay structure on the NMW legislation.
For example, a pub wants to pay a more attractive rate than the National Minimum Wage. It opts for the following rates which would be permissible under the Act:
- 18-20 year olds: 20p per hour more than the NMW for employees in that age band. This is still lower than NMW for 21-24 year olds and lower than the NLW.
- 21-24 year olds: 45p per hour more than the NMW for employees in that age band. This is still lower than the NLW.
For some practical pointers to avoiding age discrimination see our Brief guide to age discrimination
The content of this page is a summary of the law in force at the present time and is not exhaustive, nor does it contain definitive advice. Specialist legal advice should be sought in relation to any queries that may arise.