Property partnership Strutt & Parker is recommending a 1.4% increase for farmworker wages this year, as a guide for employers in England.
Since the abolition of the Agricultural Wages Board in 2013, English farm worker pay rates are no longer covered by a statutory annual review. However, most employers still use an October date for pay reviews.
Minimum wage levels for farmworkers are still set by an official pay review body in Northern Ireland, Scotland and Wales.
See also: Legal guide to employing farm staff
The recommendation from Strutt & Parker would raise the standard worker’s rate (grade 2) to £7.50/hour, mirroring the national living wage, and increase the craftsman’s rate (grade 4) to £8.85/hour, with other pay grades rising accordingly.
George Chichester, farming consultant for Strutt & Parker, said the business had made the recommendation to clients based on several factors, including the approach taken by the remaining agricultural wages boards, the level of recent public sector pay awards, rising pension contributions and the rate of inflation.
“The pay bodies in Northern Ireland, Scotland and Wales have all agreed that the minimum rate for workers over 25 years of age should be the same as the national living wage, at £7.50/hour, with the equivalent of the crafstman’s rate ranging between £8.46/hour and £8.72/hour.
“Generally speaking, public sector wage rises have again been capped at 1% this year, as they have been for the previous three years, and over the 12 months to July 2017 the Retail Price Index rose by 3.6% and the Consumer Price Index by 2.6%.
“We have also taken into consideration that all employers are now required to contribute to an employee’s pension scheme, through auto-enrolment, unless the employee has opted out.
“Currently the minimum contribution is 1% of earnings, but this will rise to 2% in April 2018 (and to 3% in April 2019) – equating to an additional 1% above and beyond the pay award, albeit delayed for six months.”
Mr Chichester warned that there was an unfortunate flip side for employees, in that their own contribution to their pension fund is required to rise to 3% next April and then to 5% in April 2019.
“These total contributions belong to the employee, and benefit from a further top-up by way of tax rebate, but the money is effectively locked away until retirement and therefore an employee’s take-home pay might in practice fall over the next year, despite an increase in the rate of pay. Morally, this puts the employer in an awkward position.”
However, Mr Chichester pointed out the basic wage rates for most public sector workers do not take into account a range of other perks that might apply to farmworkers, such as housing and low (or zero) commuting costs.
Many employers have also chosen to move to paying their workers – particularly highly trained operators – a salary rather than an hourly wage and overtime, he said.
Strutt & Parker recommended a 1% wage increase in 2016 (plus 1% pension contribution), 1% in 2015, 2.3% in 2014 and 1.9% in 2013.
‘Varied wage increases’
Andrew Wraith, director, Savills food and farming team said increases he is seeing this autumn varied according to the increases adopted in previous years, when inflation figures were low but there were wage rises of 1-1.5%.
“I would hesitate to say here is a recommended rate but in most cases where we are involved we are seeing an average of 2%.
“Where there are a number of staff and depending where you are in the country there is a greater degree of looking at key employees and taking note of comparable salaries when applying increases.
“Good stockmen/spray operators/skilled men may have seen higher rates. It is a different marketplace now.”