Companies bidding to win Scottish Government contracts will have to pay the real Living Wage, ministers have announced.
This will ensure public sector contracts tackle in work poverty and promote fair work practices across the public, private and third sector where there is a risk of low pay.
The real Living Wage has been consistently higher than the UK National Living Wage and helps create an inclusive and fair economy for all.
Business Minister Ivan McKee said: “We want to use every opportunity possible to promote fair work and ensure people are paid at least the real Living Wage. By using procurement powers to ensure bidders pay the real Living Wage, the Scottish Government is leading by example to help influence employment practices and embed fair work principles.
“We will continue to engage with relevant sectors to encourage others to adopt this change across the public, private and third sector. We are firmly focused on creating the right economic conditions and fair work practices to drive a greener, fairer and more sustainable economy.”
Fair Work Minister Richard Lochhead said: “As outlined in our Programme for Government, a range of measures are being taken forward to embed Fair Work First across the economy.
“The Scottish Government recognises pay as a clear way that an employer can demonstrate a commitment to their workforce, helping tackle in-work poverty alongside wider Fair Work First criteria.
“We will also introduce further changes to strengthen criteria for Scottish Government grants from next summer, subject to limits on devolved competence, as part of the Cooperation Agreement with the Scottish Green Party.
“The number of accredited living wage employers has increased from 14 in 2014 to just over 2,300 in 2021 and we would encourage more businesses to sign up to help ensure more people see their pay uplifted to at least the real Living Wage. We encourage organisations, regardless of size, sector or location, to adopt our progressive fair work approach which will help ensure all staff receive a fair day’s pay for the work they do.”
The Fair Work Convention Co Chairs Professor Patricia Findlay and Grahame Smith welcome the announcement from the Scottish Government on introducing a requirement to pay the real Living Wage to public contracts.
Commenting on the announcement, Professor Patricia Findlay said: “The Fair Work Convention welcomes today’s announcement from the Scottish Government. Low pay is one of the key drivers of in-work poverty.
“All too often we find that disabled workers, BME workers, young workers and women in particular face precarious and low paid work, so addressing very low pay in public contracts can begin to support better outcomes for these and other workers.
“Pay is a crucial element of fair work, and for too long the obstacles to workers’ challenging and improving low pay in certain occupations and sectors have been considerable. Given this, government action to help address low pay is necessary to deliver fair work as well as to deliver on equality and anti-poverty priorities.
Grahame Smith added: I’m delighted that the Scottish Government has accepted the Convention’s view that there is no legal impediment to making the payment of the real living wage a requirement of those in receipt of public contracts.
“While this decision is a significant step forward and will make a real difference for thousands of low paid workers, we will be exploring urgently how conditionality can be extended to all dimensions of fair work, particularly requirements around collective bargaining, union recognition and the adoption of all terms and conditions negotiated nationally between employers and unions.”