Bosses Back Minimum Wage Rise

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According to pay analysts IRS, businesses are right behind the October National Minimum Wage (NMW) rate rise.

Three months ago the adult wage rate increased to £4.85 an hour up from £3.60 in 1999.

Nine in ten (94%) agree with the most recent increase, however, when asked at what level the minimum rate should be set, almost half of the survey’s respondents (44%) said £5.00 an hour.

Two-thirds of employers are already meeting the standards, only 30% reported their organisation had to increase hourly pay to meet the requirements.

This figure rises to eight in 10 (83.9%) among respondents whose organisations currently pay a minimum rate of £4.85.

A huge majority (three quarters) agree that enforced increases have to be directly funded by company profits.

More than one-third of participants (38%) felt that their staff saw the NMW as a benchmark to facilitate increases to a higher rate, bearing further weight on the claim that being seen as a “minimum wage employer” is undesirable.

Other key findings:
* More than two-fifths (44.3%) of the sample pay a minimum rate of £5.21 an hour or more, with just over a quarter (26.6%) paying their lowest paid employees more than £6.00.
* A quarter (24.8%) of survey respondents pay the statutory pay floor of £4.85 an hour to their lowest paid members of staff.

IRS Employment Review pay and benefits editor, Sheila Attwood said: "While a quarter of the respondents who stated that the adult minimum wage should be above £5.00 an hour are from organisations whose minimum rate is currently at £4.85, many organisations told us that pay increases to accommodate the NMW were funded out of company profits or through increasing prices. This suggests that while there is support for more uplifts, many organisations have few surplus funds available to absorb the cost of rises above the rate of inflation."

The research is based on the views of 129 private and public sector senior remuneration and HR managers in UK organisations.

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