Companies not ready for 6 minimum wage

Figure more likely to be around the 5.72 mark announces analyst.

A leading payroll specialist has challenged the TUC on their suggested minimum wage rise to over 6 per hour, inclusive of 18 year olds and above.

Greater Manchester based PAYEpeople has been successfully forecasting minimum wage rises for the last 9 years using specialist payroll software, providing results that many leading firms and the DTI now use for their own forecasting.

The TUC reported recently that UK economy has room to accommodate a rise to over 6 per hour and that this rate should be applicable from 18 upwards instead of 22.

Head of PAYEpeople Allan Pearson disagrees and says the rise would have significant implications for all businesses and particularly those in the North West.

ìThis year north-west retailers gave employees an average pay rise of 5.5% compared to the UK National Average of 6.1%. The TUC evidence to the Low Pay Commission recommends that the National Minimum Wage should increase to more than 6.00 per hour, an astounding 8% on the current rate of 5.52.î

Figure more likely to be around the 5.72 mark

ìOur previous experience suggests that most businesses cannot continue to support these kinds of increases. Our data suggests the minimum wage should increase by a further 3.6% to a more manageable 5.72 per hour.î

ìWe expect the new figure to be more in line with these forecastsî.

Whilst Mr Pearson says he disagrees with the proposed hike, he is behind the government for their recent efforts in enforcing the minimum wage.

More than 27m in unpaid wages has been recovered on behalf of 80,000 workers since 1999 and the government are stepping up enforcement efforts through a series of leaflet and poster campaigns in 2008.

Every worker should earn a fair wage for a fair day's work, said Employment Relations Minister Pat McFadden.

Under tighter laws, PAYEpeople warns that there will be an initial penalty of up to 5000 for all underpaying employers and that employers will be legally required to keep sufficient recorders that comply with National Minimum Wage.

If these recorders are not kept a fine could be payable.

PAYEpeople also advises employers to keep all records for a minimum of 6 years because a civil case maybe brought 6 years after an alleged failure to pay.