Business chiefs have called on the Government to think of any future impact on companies following the introduction of the National Living Wage.
Businesses across the country are having to recalculate their finances as a result of the Living Wage, announced by Chancellor George Osborne in his Budget last year.
Open to workers aged 25 and over, it sees full-time and part-time workers paid £7.20 an hour with a target of more than £9 an hour by 2020.
Babs Murphy, chief executive of the North and Western Lancashire Chamber of Commerce, said: “A decent salary can improve the lives of employees, so those firms who have made the commitment to pay a living wage should be congratulated.
“However, the government must think carefully about the scale of any future NLW increases and how they will affect businesses. Many companies may well have the ability to increase staff wages but others could end up having to divert money from other areas of their budget such as training and investment.”
The Government will ask the Low Pay Commission, which currently recommends the level of the minimum wage, to suggest a new NLW figure in April 2017.
Dr Adam Marshall, the acting Director General of the British Chambers of Commerce (BCC), added: “It is unclear whether the NLW will spur productivity or strengthen businesses, communities or the economy as a whole.
“In the face of these concerns, the government must make a clear commitment to avoid over-burdening firms when it comes to future increases in the National Living Wage.
“Future increases must be proportionate, and take account of other employment-related costs.”