When The Chancellor announced the latest extension to the furlough scheme we were right to demand that the furlough scheme must be 100% for those on minimum wage.
Under the furlough scheme, employees are paid 80 % of their contractual wages, giving the employer the option to top this up to 100%.
Whilst the furlough scheme has undoubtedly saved jobs, new pay data highlights a flaw in the scheme and that is that there is every chance workers will be paid less than the National Minimum Wage.
Again we call upon the government to act immediately to introduce a safety net to ensure that no workers falls below the NMW.
Low-earners and young workers hardest hit
The latest data from the Annual Survey of Hours and Earnings (ASHE), shows that low-paid, part-time and young workers are significantly more likely to be on furlough with reduced pay. In April, more than half of employees in the lowest docile of hourly earnings (earning less than £8.72 per hour) were furloughed and receiving reduced pay.
This means low earners were five-times more likely to be furloughed on reduced pay.
This is likely linked to the industries they work in.
The proportion of employees furloughed without being paid the top-up was highest in industries such as hospitality (39 per cent), the arts (27 per cent), and construction (26 per cent).
Pushing workers below the minimum wage
Living off 80 per cent of your wages would be a struggle for most people and its more likely to have more impact the less expendable income people have as those on higher wages will not feel the full impact of a 20% drop as their other stoppages will also be reduced.
In April, 7.2 per cent of employees were paid below the National Minimum Wage (NMW) or National Living Wage (NLW) which equates to just over two million people not being paid the legal minimum with those most likely to be affected to be Young workers, part-time workers and workers in the hospitality sectors
These new findings on furlough pay reflect something we’ve known for months: the pandemic is hitting low-paid workers hardest and that unionised workplaces are more likely to be safer and better paid have better access to sick pay
Fixing the flaw
The government must ensure the pay of no furloughed worker drops below the legal minimum wage and agree to the TUC demand that the National Minimum Wage set to £10 per hour for all.