Le Pain Quotidien joins range of UK firms in cutting perks for staff ahead of National Living Wage

The Government says that it is unable to stop companies from slashing benefits or breaks, but that doing so just to cope with the higher minimum wage is 'unacceptable'

People have lunch at Le Pain Quotidien in West Hollywood, California March 3, 2016. Picture taken March 3, 2016

Staff at Le Pain Quotidian are understood to be having their conditions cut ahead of the introduction of the National Living Wage.

The company is just the latest in a number cutting benefits and other conditions for their employees in what they say is a necessary move to allow them to afford paying people the new, higher minimum wage.

Employees of the Belgian coffee shop are reportedly losing their paid breaks in a move that effectively wipes out all the extra money they would receive from the new National Living Wage.

The company has also been criticised for taking tips rather than distributing them to staff. The Government could step in over fears that the voluntary rules the industry abides by have largely failed.

The Government introduced the National Living Wage as a way of bumping up the income of low-paid workers, effectively raising the minimum wage to £7.20 for over-25s. While companies can be subject to legal action if they do not pay that new wage, they are free to get rid of other perks like lunches or paid breaks as they wish.

Le Pain Quotidien’s change effectively means that the pay increase is wiped out, since it will reduce the number of hours that people are paid for by roughly the same proportion that the wage will go up.

Le Pain Quotidien did not return requests for comment.

The Belgian restaurant is just the latest company to make major reductions to staff’s conditions ahead of the introduction of the National Living Wage.

Italian restaurant Zizzi announced this week that it would reduce staff perks - including the amount they earn from tips and their choice of free meals. Coffee chains Caffe Nero and Eat have both made changes to the system of breaks and food that they give to staff.

Other companies including Eat are said to have brought in the same system as Le Pain Quotidien, removing paid breaks to keep the wage bill down. Others including Tesco, The John Lewis Partnership and B&Q are reported to have changed their rates for weekends and bank holidays in a bid to do the same.

Many companies are thought to have either made changes to conditions ahead of the introduction of the new rules, or are planning them.

The Government has said it is unable to step in to force companies not to make the changes, but also said it was “unacceptable” for companies to cut perks and then blame it on the new policy.

“It is for employers to decide how they manage increases in their wage bill – but it is unacceptable to reduce other perks and blame that on the introduction of the National Living Wage,” said a Department for Business, Innovation and Skills spokesperson. “Good employers will be giving their staff a pay rise and maintaining other perks.

“Employers need to ensure their pay and reward packages are competitive to retain and develop the people and talent they need for their business. The bottom line is that they must pay their workers more as a basic hourly wage. This is the key achievement of the National Living Wage and one we should all welcome.”

George Osborne said earlier this month that companies cutting perks made him angry.

“We will enforce the letter of the law but we want companies to also live by the spirit of the law,” he said on ITV’s The Agenda programme.

Mr Osborne promised that the Government would find companies that aren’t paying the new wage, but that there was little it could do about those that are getting around it by cutting other perks.

“What you get is some companies cutting the lunch break, or cutting the free lunch they were providing,” he said. “That may not be the letter of the law and we don’t in this country prescribe what everyone eats for lunch, but it’s not the spirit of the law.

“I think that companies these days should be much more careful about their reputation and much more aware of their social responsibility to their workforce as well as to their community.”