Funded early learning and childcare (ELC) - setting sustainable rates 2024 to 2025: guidance

Annex A

Requirements for ELC Real Living Wage Commitment

1. Updated Funding Follows the Child Operating Guidance was published on 12 December. Section 2 (The National Standard for all Early Learning and Childcare Providers) of the guidance sets out how settings can meet the Fair Work criterion of the National Standard and the real Living Wage commitment.

2. The Operating Guidance sets out that the key points to note on implementing the real Living Wage commitment are:

• The real Living Wage should not be confused with the National Minimum Wage (including the "national Living Wage" which, from April 2024 applies to those aged 21 and over) which is the legal minimum an employer must pay an employee and is set by the UK Government.
• The real Living Wage is a voluntary wage rate of pay which is estimated at a level based on the cost of living. These figures are calculated annually and are generally announced in November each year.
• Employers who pay the real Living Wage can, if they wish, seek to become Living Wage accredited through Living Wage Scotland. Some providers who deliver ELC in Scotland are Living Wage accredited employers, however, it is important to note that whilst the Scottish Government encourages more providers to become Living Wage accredited, it is not a requirement for becoming a funded provider.
• The commitment covers all ELC staff providing direct care to children who are receiving funded hours, regardless of age and qualification and of the setting in which they are employed.
• In line with the requirements for Living Wage accreditation, apprentices do not have to receive the real Living Wage – this is in recognition that, particularly in the earlier stages, apprentices may spend more time training than working. However, it is good practice to ensure pay rises over the course of the apprenticeship.
• In line with the Fair Work criteria (set out in Section 2 of the Funding Follows the Child Operating Guidance), employers must demonstrate a fair and equal pay policy.

3. Section 5 of the of Operating Guidance includes a set of Frequently Asked Questions regarding implementation of the ELC real Living Wage commitment.