Low Pay Commission Call for Research on the Impacts of the National Minimum Wage, including the National Living Wage, on Businesses for the 2025 and 2026 Reports

The Low Pay Commission (LPC) invites tenders from researchers to identify and assess the impact of recent increases to the National Minimum Wage (NMW) and the National Living Wage (NLW) on businesses. This is a longer-term project that complements another, shorter-term project (LPC2024/03) we are commissioning that will also look at business impacts

The aim of this study is to gain a better understanding of the impact of minimum wages, especially the National Living Wage, on businesses. We are particularly interested in the cumulative impacts of recent increases.

The Low Pay Commission invites tenders for research that will provide initial evidence by September 2025 and more substantive findings by October 2026.

This research will contribute to our understanding of how firms are adjusting to the NLW. Potential areas of investigation might include the impact of the NLW and how firms are responding/adapting in terms of: profits; productivity; capital investment; training; prices; contracts and outsourcing; hours and employment; and differentials and pay progression.

We are interested in firms' approaches in the short-term and their longer-term plans. We are also interested in whether these responses have changed over time as the minimum wage has increased. Researchers might consider different time periods, such as post-financial crisis and pre-2016; 2016-2020 (the introduction of the NLW and its initial target of 60 per cent of median wages); and post-2020 (the two-thirds target).

This project will provide evidence of how firms are coping with the recent increases in the NLW, whether there are any barriers to further progression, and how they vary sectorally, by size of firm, by geography, and type of ownership.

We are also interested in whether there has been any change to the characteristics of jobs (e.g. evidence of changes to tasks, or the merging/flexibility of roles/tasks); and the characteristics of the workforce (e.g. changes to the age structure or greater use of apprentices).

This research would ideally use firm-level data available for the same firms over time. It might want to compare the behaviour of firms before and after the increase in April 2025. We are also open to other approaches that can capture the impacts on businesses. The findings will contribute to our understanding of how firms are adjusting to the NLW.

The full requirement is set out in Schedule 07 of this Invitation to Tender (LPC2024/04). Further information can be found on our website https://www.gov.uk/government/publications/low-pay-commission-call-for-research-2025

You must submit your tender to tim.butcher@lowpay.gov.uk. It must arrive no later than 14:00 on 10 February 2025.