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Retailers warned not to cut perks to offset living wage costs

MPs are calling on the government to close the “legal loopholes” that allow retailers to offset increased living wage bills by cutting paid lunches or other staff perks.

Labour MP Joan Ryan led a backbench debate on Monday (April 18) about changes to work contracts since the national living wage was introduced on April 1. She said the changes have left workers significantly worse off, naming and shaming companies including B&Q, Morrisons, Eat and Caffè Nero.

So far, no fashion retailers have been identified, but fellow Labour MP Siobhain McDonagh told Drapers: “More and more constituents have been coming forward with their experiences as the issue becomes more public.”

She added: “We want to pursue the government to change the loopholes because it is the only way we are going to stop it.”

She suggested that changes to paid lunch breaks is one way companies have attempted to claw back costs: “It is amazing that, if you work more than five hours, you have to have a 30-minute break, but it doesn’t need to be paid.”

McDonagh suggested retailers should use the money saved from the further 1% cut in corporation tax announced last month to fund the wage increase.

Ryan said companies can “improve productivity and invest in the skills and talents of their employees” and “cut back shareholder pay just a little, so those who work hardest get the remuneration they truly deserve”.

  • Have you made changes to staff contracts as a result of the new living wage or have your benefits been affected? Tell us by emailing

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