The National Minimum Wage Act 1998 is universally applicable to ordinary ‘workers,’ that is, anyone who has a contract to do work, except for a consumer or a client Expressly included are those working through job agencies, so they have a duty not to let their profits rake into a worker’s basic entitlement. Home-workers are also included expressly, and the Secretary of State can make order for other inclusions. The SS can also make exclusions, as has been done for au pairs and family members in family business. Those engaged in accredited training can have their entitlement reduced proportional to the hours undertaken. Excluded by the Act are fishermen paid in a share of profits, unpaid volunteers and prisoners.
Hours are the ‘pay reference period,’ but where pay is not contractually referable to hours, such as pay by output, then the time actually worked must be ascertained. The principle is a very basic one: that hours worked should never as a whole be paid below the minimum. Excluded from ‘worked’ are periods when the worker is on industrial action, time travelling to and from work and absent periods.
When a worker is required to be awake and available for work, then they must also be paid, however this does not prevent so called ‘Zero hours contracts’ being used. That means you are guaranteed no hours, theoretically you are under no obligation, but it is strongly in your interest to be ready to work if your employer requests."
Minimum wages may have the positive effect of:
1. Reducing low-paid work, which may be unfair and exploitative.
2. Stimulating economic growth by increasing the purchasing power of workers.
3. Stimulating economic growth by discouraging labor-intensive industries, thereby encouraging more investment in capital and training.
4. Encouraging many of those who would normally take low-wage jobs to stay in (or return to) school and thus to accumulate human capital.
On the other hand, minimum wages may have the negative effects of:
1. Curbing economic growth by increasing the cost of labor.
2. Decreasing incentive for some low-skilled workers to gain skills.
3. Cause higher unemployment rates among the low skilled and uneducated labor as the price of labor increases to favor the more skilled or machines.
4. Cause workers laid off because of higher labor costs to consume government assistance thus increasing the cost of government.
The effects of minimum wage laws, both positive and negative, may be increased by 'knock-on effects'. Where unions are not strong, wages for those earning slightly more than the minimum may be reduced, while those earning less than the minimum are forced to compete for work at pay levels above their experience, skill or education.
Strong unions may be able to demand wage increases for workers already earning above the minimum wage. For example, some labor union contracts are based on a fixed percentage or dollar amount above the minimum wage. Certain public grants or taxes are based on a multiple of the minimum wage. (For example, a worker may have an exemption if his earnings are below 2.5 minimum wages.)
No comments:
Post a Comment