#yourquestionsanswered With minimum wage set to rise at the start of April, we've had a few questions about why we have a minimum wage and how it is set.
The Minimum Wage Act 1983 wasn't just some boring legal jargon; it was a game-changer for workers across the country 50 years ago. So why do we need it?
To guarding against exploitation:
Without a legislated minimum wage, employers could pay people whatever they wanted, particularly if they were desperate for a job. Without a minimum wage, some employers would put profits over employees and it could end up in a race to the bottom. With a minimum wage in place, workers gain a measure of protection against exploitation especially minorities or those who lacked bargaining power. It sets a baseline standard, ensuring that everyone should be paid at least enough to get by. This legislation makes it illegal to pay employees less than the minimum wage and there are some serious penalties for employers who breach this.
To ensure a decent standard of living:
The minimum wage s supposed to enable employees to afford the essentials and maintain a decent standard of living. Whether it's paying rent, buying groceries, or covering healthcare costs, a fair wage ensures that workers can meet their basic needs without having to resort to extreme measures. This is why it is adjusted regularly and why it is set at the level it is. Obviously, as the cost of living increases there are advocates for a living wage instead, but that's a blog for another time.
To promoting economic stability:
A strong economy is built on the foundation of a thriving workforce. When workers earn a decent wage, they're more likely to spend money in their communities, fueling economic growth and prosperity. In this sense, the minimum wage acts as an economic stimulus, putting more money in the pockets of those who need it most. It's a win-win situation – workers have more purchasing power, and businesses benefit from increased consumer demand.
If you are not getting paid minimum wage?
...then that's unlawful. An employer can't contract out of legal minimums, even if you sign the employment agreement that says they can. Even on salary, you need to be paid at least minimum wage for every hour worked. As always, we recommend that you get advice if you're not being treated fairly.
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