Created in partnership with the Helpdesk on Business & Human Rights
In late 2020, IKEA UK announced that it would be freezing employee pay, despite an increase in the UK living wage. The increase was announced by the UK Government in conjunction with the Living Wage Foundation in November 2020, which required accredited employers to instate the increase in pay within six months.
However, IKEA said that because of a fall in sales throughout COVID-19 and their previous funding of UK employees’ wages during a period where stores were shut due to pandemic regulations, they would not be matching the wage. Statements from IKEA said that they have ‘paused’ their living wage accreditation for the time they do not meet the living wage value.
The move was heavily criticized by civil society groups and trade unions. Following strong criticism from unions and workers’ rights groups in the UK, IKEA has since announced that it will honour the living wage increase from 1 May 2021.