CIPP feed in to Low Pay Commission report on the National Minimum Wage
20 September 2013
The CIPP Policy team published a survey in July to gather member opinion to help inform the Low Pay Commission’s report on the National Minimum Wage.
Each year the Low Pay Commission is asked to prepare a report on the National Minimum Wage (NMW). This year their remit is to:
monitor, evaluate and review the levels of the different NMW rates and make recommendations on the levels (in this case for October 2014); and review the contribution the NMW could make to the employment prospects of young people. Thank you to those members who took the time to respond to our survey. The CIPP has submitted a formal consultation response which can be accessed through the link below. A summary of key findings is also listed below.
CIPP response to consultation on NMW for LPC report
Summary of key findings
The CIPP surveyed its members using an electronic survey tool which received 66 responses. Almost two thirds of these responses (72.8%) came from respondents paying more than 250 employees. Key findings are as follows: The majority of respondents state that the NMW has little or no impact on their business, with 68% saying they always pay above the NMW rates and 28% saying they pay some staff NMW and some staff more. The main reason given from those who say the NMW does have an effect was the narrowing of the pay gap between skilled and non-skilled workers as the increase to the NMW was higher than the increases many companies were able to give the rest of the workforce. Another respondent reported difficulty implementing a salary sacrifice scheme for automatic enrolment contributions. Many respondents, though not a universally held view, feel that the NMW has a positive impact on young people, believing that it assures them a fair rate of pay whilst they gain experience. However, when asked whether the NMW has impacted the employment prospects of young people, opinion is divided, with 34% believing the NMW has affected the employment prospects of the young, compared with 40% who think it has not had an impact. The majority of respondents are not impacted by the Apprentice Rate, either because they do not have apprentices or because they pay higher than the Apprentice Rate. Of those who do hold a view, opinion was again divided between those who feel it helps young people get on the employment ladder, and those who feel the rate is too low and could discourage young people from taking up an apprenticeship. Respondent views on the retention of arrangements for the accommodation offset are inconclusive, with 22% agreeing they should remain and 11% disagreeing. The remaining 67% were not in a position to provide an opinion. When considering future levels of the NMW rates, the majority of respondents suggested rates higher than current rates, with some suggesting that it would be prudent to increase the level of the NMW whilst reducing the level of state benefits, further encouraging the view that work pays.
CIPP Policy News Journal
16/04/2014, Page 247 of 519
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