Skip to main content

Government should have given staff on Minimum Wage their full salary

Government’s plans to give staff of businesses that are required to shut 67% of their salary seems very fair, but not if you are on the minimum wage.

People on the minimum wage should have been given their full salary. Many of those who are affected are on the minimum wage, and simply cannot afford another wage cut, having lost most of their income between March and early July. The 67% restriction should only have applied after the minimum wage level had been reached.

Looking after the staff is one thing, and again the Government’s plans of giving businesses up to £3,000 per month seems fairly generous, but unfortunately for many who are strapped for cash it just will not be enough. This is because many businesses, even those that have been trading during the summer, just will not have caught up and they may now have no option but to close.

There are also problems for those who are forced to close even with the support for the business itself and the staff wage allowance. Many in the catering and hospitality area will have to dump thousands of pounds of perishable stock and they may not have the money to re-stock depending on how long their local lockdown lasts.

There are those suppliers and businesses that have hardly traded since the start of the initial lockdown who once again fall outside of the Government’s plans and will not be forced to close but in fact will be forced to cease trading.

A business that supplies labour for large events, such as conferences and theatre shows, would have had negligible income for seven months, yet at best can only get 22% Government funding under the Job Support Scheme, whilst a pub can fund 67% of its staff wages, having already benefitted from the Eat Out to Help Out scheme.

The announcement on Friday does not cover the supply chain of the hospitality sector. They are able to open their offices but have nobody to supply to. Access to the new scheme is dependent on the business being compelled to close its premises. They will not be forced to close, but again will be forced to cease trading.

Would you like to know more?

If you would like to discuss any of the above guidance, please contact Andrew Sanford or your usual Blick Rothenberg contact.

For any press queries, please contact David Barzilay whose details are to the right.

Check the impact of the Spring Budget Statement with our Tax Calculator Visit our Spring Budget Hub