Kristy Dorsey: Employers may pay price

Ed Miliband has now pledged to boost that to �8 an hour by 2020 ' a move that many employers say will threaten job creation.'' Picture Michael Gillen.
Ed Miliband has now pledged to boost that to �8 an hour by 2020 ' a move that many employers say will threaten job creation.'' Picture Michael Gillen.
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THE low-paid are front and centre of Labour’s campaign for next year’s general election and, as ever, businesses are warning of dire consequences should wages rise too quickly.

The current minimum wage of £6.31 for adults is set to rise to £6.50 on Wednesday, an increase of 3 per cent. Ed Miliband has now pledged to boost that to £8 an hour by 2020 – a move that many employers say will threaten job creation.

There is a “basic right”, the Labour leader says, that hard work should be rewarded with fair pay. It’s a premise few would attempt to shoot down, apart from the debate about the level at which fair pay resides.

But even with a minimum wage, many continue to slip between the cracks as they head out in their legions every day to work for nothing.

Despite various efforts to curtail it, the practice of hiring unpaid interns remains widespread throughout the UK. While it can be a valuable way of gaining experience, many young people and campaigners say this unpaid labour is exploitation.

The creative industries – fashion, media, advertising and so forth – have particularly bad reputations when it comes to working students for long hours and no money. Stories of shocking treatment abound, and it’s odds-on that many of these tales are true.

Earlier this month, an Edinburgh interior design firm was reported to HMRC after advertising for “potentially illegal” unpaid internships. The advertisement aimed to fill half-a-dozen six-month placements of 35 hours per week at Casa Morada.

The combined placements would come to a total of 5,460 hours of unpaid work, which at the current adult minimum wage would be worth more than £34,000.

Since then, Casa Morada has reportedly announced its intention to work with campaign group Intern Aware, but the online backlash that brought about this volte-face is just one of the reasons why small businesses should steer clear of unpaid internships whenever possible. In addition to the potential for some pretty horrendous publicity, there are solid bottom-line consequences as well.

Any pool of potential recruits automatically abates when limited to those who can afford to work for nothing – not all of the best candidates are available. And even after landing a top-notch worker, chances are they’ll be off as soon as they find a paid position elsewhere, draining away the management time invested in their training.

According to UK employment law, workers are entitled to the minimum wage if they have set hours and contribute to the value of the business. There is an exception for charitable organisations taking on volunteers.

Some have called for a tightening of these guidelines, and that would certainly be helpful. But as a general rule of thumb, if it looks like a job and feels like a job, then a paycheque is in order. «