The UK economy will not be able to handle an increase of the minimum wage to £6 an hour, according to reports.
The Trade Unions Congress (TUC) recently reported that the UK economy could accommodate a rise to over £6 per hour for all those aged 18 and over.
However, Manchester based PAYEpeople, called the union’s claim into question, insisting the rise would have implications for businesses across the UK, but particularly in the north-west.
“This year, north-west retailers gave employees an average pay rise of 5.5% compared to the UK national average of 6.1%,” said Allan Pearson, head of PAYEpeople.
“The TUC recommends that the national minimum wage should increase to more than £6 per hour, an astounding 8% on the current rate of £5.52. Our experience suggests that most businesses cannot continue to support these kinds of increases,” he added.
PAYEpeople suggest a wage increase of 3.6%, or £5.72 per hour.
The firm also warned that with stricter legislation being enforced, employers not paying the minimum wage could be fined a penalty of £5000.
Employers are advised to keep sufficient records that comply with the national minimum wage for six years, as a civil case could be brought up to six years after an alleged failure to pay.
© Crimson Business Ltd. 2008
