Companies looking to win contracts from the Scottish Government will now have to pay the real living wage.
The wage, currently sitting at £9.50 per hour, will be required from “most” contract bids, according to new procurement guidance from the Scottish Government.
Announcing the move, trade minister Ivan McKee said ministers want to use “every opportunity” to promote fair work practices.
“By using procurement powers to ensure bidders pay the real living wage, the Scottish Government is leading by example to help influence employment practices and embed fair work principles,” he said.
“We will continue to engage with relevant sectors to encourage others to adopt this change across the public, private and third sector.
“We are firmly focused on creating the right economic conditions and fair work practices to drive a greener, fairer and more sustainable economy.”
The change comes as a result of the SNP and Scottish Green co-operation agreement signed in August, which resulted in a shared policy platform between the two parties and two ministerial positions for the Greens.
Fair work minister Richard Lochhead also said changes will be made next year to the eligibility criteria for Government grants.
“As outlined in our Programme for Government, a range of measures are being taken forward to embed Fair Work First across the economy,” he said.
“The Scottish Government recognises pay as a clear way that an employer can demonstrate a commitment to their workforce, helping tackle in-work poverty alongside wider Fair Work First criteria.
“We will also introduce further changes to strengthen criteria for Scottish Government grants from next summer, subject to limits on devolved competence, as part of the co-operation agreement with the Scottish Green Party.”
Scottish Greens economy spokeswoman Maggie Chapman said: “This is a significant step forward by the Scottish Government, building on what we agreed in the co-operation deal on public grants.
“Requiring all government procurement contracts to pay the living wage will make a big impact on driving up pay and improving people’s lives, embedding the fair work agenda into Scotland’s economy more than ever before.
“I look forward to further work in this area in the public, private and third sectors.
“This is an important step towards a green recovery in which being in work comes with security and respect, and pays for a decent standard of life.”