How will National Minimum Wage and National Living Wage affect employers?

Up to 170,000 of the lowest paid workers in Northern Ireland are due to receive a pay rise on Tuesday.

The National Living Wage paid to over-21s is going up by 6.7%, from £11.44 to £12.21 per hour.

The National Minimum Wage for 18 to 20-year-olds is increasing by 16%, from £8.60 to £10 per hour.

The National Minimum Wage for under-18s is going up by 18%, from £6.40 to £7.55 per hour.

The apprenticeship rate, which applies to eligible people under 19 or those over 19 in the first year of an apprenticeship, will increase by the same amount.

Employers will have to pay this increase in wages, on top of the increase in employers’ National Insurance contributions which are coming into effect on 6 April.

Mount Charles employs about 3,500 people in support services, like catering, cleaning and events, across the island of Ireland.

Chief strategy officer Gavin Annon said: “This impact, between National Insurance and National Living Wage is roughly an extra £2.5m to us, so it’s significant.

“We’re a low-margin business as it is so we can only pass that cost on to our clients so much. It’s been a huge ask for us to try and find a way to mitigate this.”

Mr Annon said the change is “frustrating” but the company will “have to be smarter with the resources that we deploy”.

“The rubber hasn’t hit the road on this yet – it’s only coming into place this week – so as and when you see that impact, I think it will change attitudes and behaviour in terms of what this actually looks like,” he added.

Mr Annon is also president of Belfast Chamber which has more than 600 members.

“The mood music in general has not been good,” he said.

“Out of those 600 members, most are small and medium-sized so they won’t have broad shoulders to carry this level of impact.”

Some members have already decided to pause growth plans and recruitment.

“We need to have long-term sustainable success for businesses but at the minute the attitude has swung the other way where they need to pump the brakes and are in survival mode.”

Speaking about different sectors, Mr Annon said: “It would be catastrophic for hospitality, retail, financial services – all the sectors that made Belfast their home – if they decide it’s too expensive to be here anymore.

“Let’s not make this one step too far.”

He added that small organisations that are “mighty” won’t have the resilience to carry through this change because the impact is “coming so quickly”.