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Fast-food firms feel pressure on wages

01 January 2000
Fast-food firms feel pressure on wages

TWO-thirds of all fast-food companies will be forced to increase employees' wages to comply with minimum wage legislation, says a new report.

The study, by independent research company Incomes Data Services, shows that 18 out of 27 leading fast-food groups are currently paying front of house staff below the £3.60 per hour statutory minimum wage which comes into force next April.

The lowest payer, says the report, is Pizza Hut, which has a national starter rate of £3.10, rising to £3.20 for trained staff.

The highest-paying group in London was Pràt à Manger, at £5 for trained staff. Outside London the Seattle Coffee Company paid its trained front of house staff £4.

But, according to the report, few firms will need to increase hourly pay rates for people younger than 22 years old, who will be entitled to a statutory rate of £3 from next year.

Some companies are moving away from age-related pay rates, with firms such as Burger King applying standard pay rates for all employees regardless of age.

McDonald's has also increased rates for 16- and 17-year-olds by 12.1% to bring pay in line with its adult levels.

These developments, says the report, may be explained by concerns over the high level of staff turnover in the industry.

l The House of Lords this week voted to allow regional and other exemptions to the minimum wage, although the Government said it will overrule the decision because it is committed to a universal minimum wage.

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