Minimum wage for zero hours staff '˜could create resentment' claims report

The Institute of Economic Affairs (IEA) has called for an overhaul of the UK’s minimum wage rate to simplify the current “over-complicated and increasingly politicised” structure.

It has also urged against a proposal by the Taylor Review of modern working practices for a higher rate of pay for workers on zero-hours contracts.

An IEA spokesman said: “A higher rate for zero-hours contracts workers is likely to create resentment amongst fixed-hour workers, many of whom work the same or fewer hours.”

It warned that a higher rate could discourage workers from taking fixed-hours contracts and make employers less likely to offer zero-hours contracts.

“The UK currently has five different age-related minimum hourly wage rates and, if adopted, the Taylor Review suggestions would bring this up to nine,” the spokesman added.

“The rules are difficult to understand and apply, leading to compliance problems and an increased use of resources devoted to enforcement.”

The IEA said that many cases of underpayment result from small businesses “with no prior experience or legal expertise - not understanding the complicated rules”.

It added that changes such as the national living wage have “added increased administrative burdens” and that the system needs updating.