ac_litigation

Amicus Law Commercial are problem solvers, not difficulty creators…

Let’s give you an example by way of case study.
“As a start up business I need to employ half a dozen staff to build up the business. However, until they start to generate income I can only afford to pay them £100 a week. I’m told this isn’t allowed as they will be paid less than the minimum wage”.

The legal issues:
A worker may not be paid less than the minimum wage for the hours they work. For adults this is currently £6.08. Assuming that each worker will need to put a lot of work in to generate the business employers those hours and salary would automatically fall foul of the NMW provisions.

The commercial reality:
Many businesses face this problem. Without generating business they cannot afford to pay staff. It may be that it will take months for the first work to materialise and even longer for the first payment to be received.

The solution:
There is no easy way round this (typical lawyers!). However, structuring the first few months of work may alleviate many of the problems.

Firstly, let’s assume:
• That no work or payments being received for two months with only £5,400 available to pay wages, and
• Assuming each of the six staff ideally need to work a 35 hour week the wage bill will be £11,500
Therefore:
• Firstly look at the positives. Each member of staff could legally work 16 hours a week. This is nearly 50% of the working week. Therefore, impressing upon the new employees to need to work super efficiently on a part-time basis for the first three months, perhaps job sharing, may be enough; or
• Staggering the start dates. Let the first three start on 25 hours for the first month and phasing in the remaining staff throughout the remaining period; or
• Paying monthly rather than weekly, thereby making the last month’s salary payments at a time when orders and payments are coming through; or
• Do they need to be employees at all? Could they be self-employed or consultants, perhaps they could be on some form of share option…

None of these solutions are perfect and all have potential issues but from a seemly problematical start point a solution can be found.

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