Wednesday 24 March 2021
Wage floor to the furlough scheme
The petition of residents of the United Kingdom,
Declares that no-one should ever be paid less than the National Minimum Wage; further declares that the Government furlough scheme is leaving millions of low-paid workers on less than this basic minimum pay; notes that new official figures show that over two million workers have been paid less than the National Minimum Wage this year; further that this is nearly five times as many workers as in 2019; and further declares that this crisis should not be paid for on the backs of low-paid workers.
The petitioners therefore request that the House of Commons urge the Government to introduce a wage floor in the furlough scheme to ensure that no worker is paid less than the National Minimum Wage.
And the petitioners remain, etc.—[Presented by Richard Burgon, Official Report, 2 February 2021; Vol. 688, c. 925 .]
Observations from The Financial Secretary to the Treasury (Jesse Norman):
The Government thank Richard Burgon for submitting the petition on behalf of his constituents about introducing a wage floor to the GRS.
The GRS covers the cost of wages for hours not worked. For these non-worked hours, there is no entitlement to a minimum wage. Employers can pay employees more than the grant amount and wider support is available.
The National Living Wage (NLW) and National Minimum Wage (NMW) are calculated on the basis of hours worked, which includes time spent travelling on business or training. Under the GRS, for hours worked, those on minimum wages will continue to be paid their appropriate minimum wage.
The GRS covers the cost of wages for hours not worked. For such hours, employees are not entitled to the NLW or NMW. As a result, for time spent not working, the employer is not required to pay more than 80% of the usual wage for furloughed hours, even if that means the furlough pay is less than the appropriate minimum wage. Time spent training is counted as working time and so must be paid appropriate minimum wage.
This is a decision for employers to make alone, but the terms of the scheme do allow for employers to make a top-up payment, should they deem this affordable and appropriate.
The GRS is just one part of a £407 billion support package of Government support, which has protected jobs and helped millions of people across the UK continue to provide for their families. This package has boosted the generosity of the welfare system by £7.4 billion in 2020-21. To support those on the lowest incomes, the Chancellor announced at the Budget that the temporary £20 uplift to universal credit will continue for a further six months, and working tax credit claimants will receive an equivalent of six months of support through a one-off payment of £500.