minimum wage, the government must help businesses adapt to meet the higher wage in these challenging times. The survey from Learning and Work Institute canvased 1,000 businesses. While most employers said they didn?t feel that the planned increase would have a negative impact on their business, businesses in sectors struggling in the wake of the COVID-19 pandemic were less confident. Conducted at the beginning of March, in the early weeks of the coronavirus crisis, the survey revealed that 54% of employers supported the increase in the National Living Wage, while only 9% opposed the move. Over half of the businesses surveyed said a higher minimum wage would benefit the economy and help boost UK productivity. However, 37% of companies with fewer than 50 employees were concerned that an increase in the minimum wage would have a negative impact on their organisations. Although half of businesses surveyed said they would not need to do anything to meet higher minimum wage requirement, some anticipated that changes would be required to meet the increased cost; which could have wider implications for their customers and staff.
- 22% of businesses said they would pass the cost on to consumers;
- 15% would hire fewer members of staff;
- 10% would increase the use of temporary or flexible contracts;
- 10% would also reduce staff benefits such as bonuses, breaks and discounts.
Government supportThe majority of employers said additional government support would be necessary to help them manage an increase in the minimum wage.
“While the government’s 2024 target may well still be achievable and important to support household incomes in the Coronavirus recession, increases in the wage floor must be balanced against the risk of adding to unemployment, and these increases should be matched by support for businesses to adapt.
- 37% of employers supported the idea of additional government help to invest in skills and training
- 33% supported a temporary reduction in national insurance contributions
- 31% wanted more advice from HMRC on complying with the minimum wage
- 17% said government should not provide any support to employers
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