Crieff Hydro owner Stephen Leckie says an increase of more than £1 an hour in the national living wage will cost his business £750,000.
The rise from £10.42 to £11.44 an hour was announced by chancellor Jeremy Hunt in his autumn statement. The 9.8% increase will take effect from April 1.
Mr Leckie employs 860 staff across seven Scottish venues including Murraypark Hotel in Crieff and the flagship Crieff Hydro resort.
He said the increase comes at a time when his energy costs and rates have also risen significantly.
“No one is arguing against the concept of a national living wage,” he said.
“But this is a big hike and more than we had planned. We’d set our budgets based at a rate of £11.
“Our wage bill is around £15 million a year with around half of our staff being paid a little more than the current national living wage.
“This will add around £750,000 at a time when we’ve been impacted by a huge increase in energy costs and rates.”
Mr Leckie said staff being paid above the current national living wage may also expect their wages to increase.
“It will have a knock-on effect,” he added. “A member of staff currently paid £11.50 will now expect a rise to reflect their years of service.”
Should staff tips be part of national living wage calculation?
The Crieff Hydro owner said the national living wage is not fairly calculated for hospitality businesses.
He said some of his staff members could expect to receive around £300 a month in tips. This is taxed but not judged to be part of an hourly rate.
Meanwhile his staff also receive meals, which is again another saving, worth around £1 an hour.
“At the moment our staff could be on £10.50, but the meal allowance is worth another £1 an hour and tips add another £2 an hour,” he said.
“The national living wage doesn’t account for these benefits.”
Scottish budget demands
Ahead of next month’s Scottish budget, Mr Leckie – who is also president of the Scottish Chambers of Commerce – said the decision to extend 75% business rates relief for hospitality businesses in England must be matched by the Scottish Government.
He also said the difference in income tax bands and rates between Scotland and England could not increase further.
Stephen Montgomery, director of the Scottish Hospitality Group, echoed the call for rates relief.
He said: “The survival of our jobs, our livelihoods and local venues across Scotland are on the line and depend on emergency support.
“The reality is that Scottish hospitality is fighting for survival. The cost-of-living crisis and inflation has also seen the cost of doing business skyrocket, with energy prices and supplier costs going through the roof.”
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