JustTinkering
Small businesses are getting slugged again by this government because Andrew Little believes that employees deserve more sick days and a higher minimum wage.
He says he understands the pressure on small businesses, but clearly he does not have a clue.
Where staff are on the minimum wage the move to $20.00 per hour will add $92.00 to the weekly wage bill. Anyone earning more will expect their wages to rise by $2.30 per hour too and why shouldn’t they? Not much you say but where is the money to come from?
An additional 5 days sick leave will impact $800.00 paid for non-productivity.
In a small business – it might be a busy café, a cleaning business or small retail – you need to find replacement staff to cover for sick days. In many cases a temp will have to be employed at a premium rate that includes holiday pay. For every extra 5 sick days this is likely be a minimum of an additional $980.00. And temp staff are not always as productive and often need some initial training and supervision.
It is easy to predict that those people that regularly run out of sick pay now will also run out when it is increased by another 5. Not their fault but why should the employer pay?
And don’t forget Ardern’s additional holiday – another $160.00 per person (and premium rates if that day is worked).
That means some real pain for the small business owner.
Annual Impact per staff member (minimum)
- Wage increase = $4,784.00
- Additional Sick Pay = $800.00
- Temporary Staff = $980.00
- Ardern’s Holiday = $160.00
- Total = $6,724.00
| Annual Impact by Staff Numbers (7k p.a.) | |||
| 3 | 5 | 7 | 10 |
| 21,000 | 35,000 | 49,000 | 70,000 |
The owner is always the last to be paid in any small business. Now they may never get paid. They are hurting right now, and many have borrowed to keep going. Many will not survive this considerable impact on their staffing costs.
The downstream consequences are foreseeable:
- Job applicant with lots of kids – sorry your application unsuccessful
- Employee with lots of kids first to be made redundant
- Employee with lots of sick days first to be made redundant
- Employees on above minimum wage will be replaced with minimum wage employees
Andrew Little would not survive running any small business. He is all talk and no substance at our cost.
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