CIPP response to LPC consultation on minimum wage rates for April 2019

04 June 2018

The CIPP’s policy team published a survey to collect the views of payroll professionals, the key findings of which are as follows:

  • 86% of respondents stated that the introduction of the National Minimum Wage (NLW) had increased their wage bill to some extent since its introduction in April 2016

  • However, 100% of respondents reported that the introduction had not affected jobs and they had not been forced to make any workers redundant, nor recruit fewer staff

  • Only 14% of respondents stated that they had been forced to reduce staff hours as a result of the NLW

  • 67% of respondents have made more use of zero hours contracts since the introduction of the NLW

  • All respondents said the NLW has motivated staff, and 50% say that absenteeism and staff turnover has reduced

  • 95% say that the NLW has had no impact on benefits packages

  • All respondents said there has been no impact on the age profile of the workforce

  • A quarter of respondents believe the expected increase to the NLW in April 2020 will have no effect on their business, with 10% believing that it will have a big effect

  • 25% of respondents say that they have already begun recruiting apprentices as a direct result of the Apprenticeship Levy and a further 10% are planning on doing so

  • The majority of respondents pay their workers more than the minimum rates

  • Experience of HMRC’s enforcement of the National Minimum Wage (NMW) is not good

  • Use of zero hours or short hours contracts is not commonplace, with only a quarter of respondents stating that they are used to some extent

  • 56% of respondents who use flexible employment contracts said that workers tend to work similar hours each week

 

Conclusion

Whilst the introduction of the NLW has affected many businesses, the impact on jobs and worker hours has been minimal. Whilst our research shows the NLW has had a positive impact on staff morale, there has been a significant increase in the use of zero hours contracts.

Where the number of recruiting, or intending to recruit, apprentices following the introduction of the apprenticeship levy has shown a slight increase, there are those who feel that the apprenticeship levy is simply another form of taxation from which they will not benefit.

Every year, and this year is no exception, our members tell us that although they pay above minimum rates, they still experience difficulties when it comes to HMRC enforcement of the minimum wage and understanding government guidance, which still appears unclear and difficult to interpret. 

 

CIPP comment

Thank you to all those who took the time to complete this survey. Open consultation surveys and formal consultation responses can be found under My CIPP / Policy hub on the CIPP website.

The CIPP offers a one day training course covering National Minimum Wage and other worker entitlements.  Click here to book or for more information.

 

 

 


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