Due to inability to afford minimum wage increase, business owner has to terminate staff.



One in four small businesses want government support for higher staff costs if the minimum wage increases. Others warn that this could mean they have to lay off employees.

One boss has warned that small businesses will have to lay off employees as a result of government plans to raise the minimum wage.

In his Today’s Budget Rishi Sunak, Chancellor, confirmed that the national living wage would be maintained rise from £8.72 an hour to £9.50 This is a major increase.

Since 2016, the national living wage has been rebranded as the minimum wage.

Small business owners are open to the idea of paying their staff more, but rising wages could force employees to be laid off.

Anne-Mari Niemela (51), is the managing director at FoxPrint in Leicestershire, which has nine employees.

She stated that small businesses had just taken a financial blow from the pandemic but will continue to struggle due to higher wages and other bills.

Niemela stated the following to The Mirror: “To be honest, he [Sunak] seems to have forgotten that small businesses like mine have just gone through the toughest 20 months in our histories.

“Although I am all for wage increases, what impact will it have on our cash flow? Personally, I will be in debt for a very long time.

“This may mean redundancies. There is only so much you can do cashflow-wise when the cost of everything is going up. Something is going to have to give.”

One in four small business owners believe the government should offer additional support for the minimum wages increase.

Sandra Rowley, card payment solutions provider takepayments.com stated: “While the announcement of the rise of the minimum wage is welcomed for workers, for small businesses owners this is another cost challenge to running their business.

“Apart from the rising energy costs, Increase in petrol prices , rise in Inflation and the confirmed National Insurance increase, this 6.6% increase would require an additional £1,000 per year for minimum wage full time workers.”

The Chancellor does not care about smaller businesses, Niemela added.

“As a business owner, I doubt he is familiar with the workings of microbusinesses.” she said.

“He was more interested talking about flights in his Budget Champagne . He doesn’t like manufacturing because it’s not as beautiful as other areas.

Niemela claimed that Sunak had missed an opportunity for schemes to help smaller companies.

“I think it should be about securing jobs,”She spoke. “How about supporting existing staff members that have come back off furlough? My staff are like my extended family.”

Two million people are expected to receive the 6.6% increase in minimum wage. This is due to take effect on April 1, 2022.

Workers currently on the minimum wage will be receiving the extra cash, which for those working 40 hours a week could amount to around an extra £5 per week or £1,800 per year.

This will mean that workers will get paid the lowest possible wages. However, there will be exceptions.

While the headline announcement regards workers over 23, the national minimum wage for 21 to 22-year-olds is set to increase from £8.36 to £9.18.

Meanwhile the National Minimum Wage for 18 to 20-year-olds is due to increase from £6.56 to £6.83 while for under-18s it will grow from £4.62 to £4.81.

Self-employed workers will not be eligible for the increase in the minimum wage. This applies to all people under 16.

You will not receive the boost if you live with your family and don’t pay for meals or accommodation.