Last reviewed 15 March 2021

Ikea could lose its Living Wage Employer status after refusing to introduce the new Real Living Wage (RLW) rate of £9.50 an hour (an increase of 20p on the previous rate).

Accredited Living Wage employers have been certified by the Living Wage Foundation (LWF) as having agreed to pay what the Foundation calls the only UK wage rate which meets everyday needs — such as the weekly shop, or a surprise trip to the dentist.

It is voluntarily paid by 7000 UK businesses, The rates for 2020/21 were announced on 9 November 2020 as £9.50 per hour, with a £10.85 London rate. All employees should receive the new rate by 9 May 2021.

The LWF has said that there will be “a crunch meeting” this month and, if the new rates are not implemented, then “IKEA will not be recognised by us as a Living Wage Employer”.

Although the company describes itself as a “Principal Partner” on the Living Wage Foundation website, and is represented on the Foundation’s Advisory Council, it has said that it will not be raising its minimum rate to £9.50.

The GMB union has pointed out that Ikea recently posted financial results showing total sales of £1.9 billion in the UK for the financial year ending 31 August 2020, with online sales surging 31% through the pandemic.

GMB Regional Organiser, David Shamma, said: “Ikea is one of the UK’s best-known brands and it will come as a shock when loyal customers find out how the company treats its workforce”.

KEA, which imposed a pay freeze on its employees last year, said: “We are operating in an environment that continues to be challenging and uncertain but our focus, as it has been since the start of the pandemic, has been on protecting livelihoods for the long term”.