worker, someone who is self-employed, a freelancer, an agency / temporary worker, someone employed on a zero hours contract or a person with multiple jobs.
Due to the uncertainty surrounding the income levels for these types of worker, they face higher levels of risk in life, for example, they may struggle to take out a loan or to secure a mortgage as a result of their varied earnings. The argument is that the application of a higher minimum wage in these circumstances would serve to protect workers and at least alleviate some of the stress associated with financial uncertainty that they face. It would also protect individuals should they become sick or fall pregnant as self-employed workers do not receive any occupational sick or maternity pay that a permanent employee might expect to receive from their employer. Additionally, self-employed workers receive no entitlement to holiday pay.
Author Ben Glover commented
"Self-employed workers are not protected by the safety net that many of us take for granted, from sick pay to maternity cover.
This bargain is only fair if self-employed people earn enough to cover the additional risk they take on, but too often in Britain today this is simply not happening. That's why we are calling for a new, higher minimum wage for the self- employed." There have been suggestions that banks or trade unions could oversee employment benefits and holiday pay, drawing influence from the Ghent system which has been implemented in other countries, an example of one being Denmark. The system’s name is derived from the Belgian city where it was initially piloted, and it involves bodies other than the government administering benefits to liquid employees. There was no fixed minimum wage figure for liquid workers provided as Demos confirmed that the Low Pay Commission should conduct research into this and provide the relevant rate. There were also calls for the government and banks to offer training to the self-employed on the issue of managing their finances and a recommendation to introduce an auto-enrolment scheme for the self-employed.
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Government releases new minimum wage figures for April 2020 3 January 2020
The national living wage is set to increase by 6.2% from the turn of the new tax year, which will mean that employees aged 25 and over will receive £8.72 per hour, as opposed to the current rate of £8.21. The rate is more than quadruple that of inflation and the government has called it “the biggest cash increase ever”.
The comprehensive list of rates is laid out below, with workers in all age brackets eligible for an increase to the minimum amount that they can expect to be paid per hour:
• The National Living Wage for ages 25 and above - up 6.2% to £8.72 • The National Minimum Wage for 21 to 24-year-olds - up 6.5% to £8.20 • For 18 to 20-year-olds - up 4.9% to £6.45 • For under-18s - up 4.6% to £4.55 • For apprentices - up 6.4% to £4.15 • The Prime Minister, Boris Johnson, said:
“For too long, people haven’t seen the pay rises they deserve.”
Many businesses have expressed their concern at the new rates, and the fact that they have increased at such a substantial rate over that of inflation. There are calls for the government to cut operational costs for companies in other areas to avoid placing them in situations of financial pressure. The BBC reported that Hannah Essex, co-executive director of the British Chambers of Commerce, commented that many companies “have struggled with increased costs in a time of great economic uncertainty.” She went on to say:
"Raising wage floors so far above the rate of inflation will pile further pressure on cash flow and eat into training and investment budgets.
The Chartered Institute of Payroll Professionals
Payroll: need to know
cipp.org.uk
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