NHF Asks: What do Conservative and Labour wages policies mean for salons?

In amongst the turmoil of Brexit, one message seems clear – a General Election is coming.  Both parties have set out proposals for increasing wages, increasing the rights of employees and making sure those rights are properly enforced.  But what does that mean for employers?

Wages

Conversative:

National Living Wages increases to £10.50 for 21-year olds and over within 5 years.

Labour:

National Living Wage increases to £10 for 16-year olds and over in 2020.

Hilary Hall, NHF/NBF chief executive, said: “Of course employers want to pay their talented stylists, barbers and therapists of all ages a decent wage.  But there comes a point when ever-increasing wages become unaffordable for small businesses, especially service industries where wages and pensions are such a high proportion of overall costs.  Either party’s proposed increases would make the UK’s minimum wage rates the highest in the world.  But no-one knows how Brexit will affect the UK economy over the next few years, so this is the worst possible time for UK employers to face such steep rises.”

Workers’ rights – Conservative policies

The government published a number of consultations on employment-related policies just as Teresa May stepped down as Prime Minister.  Proposals include:

• Employers providing more support to get people with disabilities or long-term health conditions back into work, which could include phased returns to work, workplace modifications to meet the needs of disabled employees, seeking occupational health advice and other steps before an employee could be fairly dismissed on the grounds of ill health.
• Increasing the qualifying threshold for statutory sick pay (SSP) – currently £118 per week – to bring more employees into scope, particularly part-time workers.  Employers will have to provide written information from day one on eligibility for sick leave and pay.  There are also proposals to give small businesses a sick pay rebate for those who manage employees on sick leave and successfully get them back into work.
• Additional parental leave rights to help parents combine childcare and work and for parents of babies which need neonatal care after birth.
• Encouraging employers to consider if jobs can be done flexibly and, for employers with more than 250 employees to publish their family-related leave, pay and flexible working policies.

Workers’ rights – Labour policies

At their party conference in Brighton, the Labour leader Jeremy Corbyn announced ‘the biggest extension of rights for workers that our country has ever seen.  We will put power in the hands of workers.’  Proposals include:

• Ending zero hours contracts and banning unpaid internships.
• Employers would take part in ‘sectoral collective bargaining’ where trade unions and employers would negotiate agreements on minimum terms, conditions and standards on a sector-by-sector basis.
• Establishing a Ministry for Employment Rights and a Workers’ Protection Agency to enforce rights, standards and protections.
• Create a single status of ‘worker’ for everyone apart from the genuinely self-employed.

Hilary Hall, NHF/NBF chief executive commented: “Both parties are focussed on protecting workers’ rights, but there hasn’t been enough recognition that these policies mean employers will have further costs to absorb.  At present, businesses wanting to reduce their costs can switch to self-employment – but that leaves the salons who employ their staff at a huge financial disadvantage compared to those who don’t employ anyone.  We have written to all three main parties calling for them to come up with a clear definition on what ‘genuine self-employment’ means as a matter of urgency.”

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