Company Formation Reaction to New Minimum Wage Laws

There has been much in the media recently about the fact that many companies – ranging from large organisations to small recently formed businesses – have become overly reliant on apprentices and internships throughout the recession.

This has lead, it has been suggested, to companies discriminating against apprentices and those doing an internship. As a consequence, the government has devised a new employment law, with the objective of ensuring all apprentices in the UK are paid and treated fairly.

Enforceable from the 1st October, under the new laws company formation owners will have to pay apprentices a minimal wage of £2.50 an hour. The uniform minimum wage rate has also increased across the board to £5.93 per hour. We ask Ben Lamb, spokesperson for the Federation of Small Business and Enterprise for his feedback on the new legislation:

“While I feel that the increase in minimum wage is fair and works both to protect the lowest paid workers and ensure that small business can still afford to hire staff, I think plans to introduce a minimal wage for apprentices may dissuade small businesses from hiring them – especially in the current climate.”