The decision by food giant Nestlé to pay its contract staff and agency workers the Living Wage has been strongly welcomed by campaigners and trade union leaders.
Living Wage Foundation director Rhys Moore said: "The accreditation of Nestlé as a Living Wage employer marks a significant milestone in the campaign to tackle in-work poverty."
The head of the Unite union, Len McCluskey, said the decision was a "positive stance which shows that paying a living wage is not just good for communities but makes good business sense too".
The GMB union's Tim Roache suggested the move could enable "many more" big manufacturers to raise wages for the lowest paid employees.
Food giant Nestle has pledged to pay all of its workers the Living Wage.
The company already pays at least the Living Wage to its own employees, but it has now committed to pay agency workers and contract staff the rate, which is set at £8.80 in London and £7.65 elsewhere.
The move means about 800 different contractors that work with Nestle will implement the Living Wage by December 2017.
The Government could drastically increase the amount of workers on living wage by raising the salaries of some of its own workers, like those in the care industry, the Archbishop of York has told Good Morning Britain.
Dr John Semantu dismissed suggestions raising the minimum wage to a living salary would prove too difficult for businesses and said:
"The Government is one of the biggest employers so if they really want to do it, for example in the care industry, the Government could...increase the kind of budgets, then it is quite possible people could be paid a living wage."
Raising salaries to the Living Wage does not take into account "the effects in wages might have on the job opportunities of the lowest paid," according to the Business Secretary.
Vince Cable hinted raising salaries to the Living Wage may have a detrimental effect on low-paid workers and said:
The majority of people living in poverty in the UK are from "working households", according to the chair of the Living Wage Commission.
The Archbishop of York said:
The number of workers earning less than a living wage is a "national scandal" and the Government should aim to move at least one million of them out of poverty, according to a report.
A year-long study from the Living Wage Commission urged the Government to implement a series of "low cost" measures, such as higher tax revenues and reduced in-work benefits.
Commission chair, the Archbishop of York John Sentamu, said the measures would help raise the salaries of half a million public sector workers.
Professional service firms such as accountancy, banks and construction companies could boost the pay of 375,000 workers if they agreed to pay the Living Wage, currently set at £8.80 an hour in London and £7.65 elsewhere, compared to the national minimum wage of £6.31, said the report.
The commission, made up of business, union and voluntary sector leaders, warned a failure to extend the Living Wage would mean families continuing to rely on food banks and "unsustainable debt" to get by.
Ed Miliband says that the Living Wage is about rewarding hard working people.
The plans for the Living Wage may do more harm than good, thinks the Director General of the Institute of Economic Affairs.
Mark Littlewood said:
Downing Street has said the Government supports the Living Wage initiative but insisted that companies would not be made to bring it in against their will.