We left yesterday's discussion of implementing a living wage at the step where your organization makes a decision on setting a living wage figure.
Once a living wage figure has been set, your next step is to ascertain where, and in what manner, it impacts your pay program and practices. Opinions differ here, but my recommendation is that the identified living wage figure becomes, for all practical purposes, your new wage/salary floor. No wage/salary steps, schedules or ranges should drop below this level, and no employees should be paid below this rate (with possible exceptions for situations like interns, student workers, etc.).
Most organizations who implement a living wage program will experience an increase in labor costs. Some will be able to immediately absorb any costs involved; others may not. As with any new pay initiative, I strongly recommend that you assess costs and affordability before any public announcement is made - internally or externally. As with any new pay initiative, be sure that you are ready and able to put your money where your mouth is - or you risk ultimately creating more bad will than good.
To be clear on a critical point, I do not see an incompatibility between a cost of labor based pay program and a living wage floor. Any organization that I have worked with on a living wage initiative is very purposeful about paying for cost of labor, not cost of living, once the living wage floor has been exceeded. We endeavor to be very clear on this when communicating to employees.
As I stated in my initial post, I do not claim to be an expert of any kind in the area of living wage. The purpose of this post series on that topic is to set out the lessons I have learned, and then provide my readers who have knowledge and information on the topic the opportunity to chime in for the benefit of all.
And so, readers, I turn the mike to you.