Half of small firms with minimum wage employees 'want to increase their workers' pay levels'

Thousands of workers in low paid jobs are set to see more money in their wage packets, a new survey of the UK's small businesses suggests.

According to the survey, carried out by the Federation of Small Businesses (FSB), around half the firms with employees who are paid the minimum wage have either already increased their wages or are thinking about doing so.

However, some small firms, which have not yet recovered from the economic downturn, say they will not be able to put wages up while the proportion not employing anyone on the minimum wage has fallen since last year.

The poll of more than 2,300 FSB member firms found that most small business owners will seek to up pay levels and share the benefits of growth if they can afford to.

John Allan, chairman of the federation, said the owners of small companies were wanting to pass on any extra profits to their workers now confidence was returning following a period of wage restraint.

He added: "Our findings also show that small businesses are already playing their part in the economic recovery by employing more staff and paying them more where possible.

"Small businesses are competing for good quality staff in the labour market and pay and benefits are a big part of this."

But in contrast the FSB research found some firms - especially those in traditionally low paid sectors such as hospitality and retail - are "still struggling" and not able to afford the cost of paying their workers more.

Mr Allan said: "Even with the beginnings of an economic recovery, small businesses in some sectors still face rising business rates and utility bills. This means that not all firms are in a position to raise salaries and policymakers therefore need to be prudent when legislating on pay."

The study also found that whereas 27% of small businesses did not have any employees on the minimum wage in 2012 the proportion now stands at less than a quarter.

A national minimum wage was introduced in the UK in April 1999 and currently stands at 6.19 per hour for employees aged 21 and over.

Copyright Press Association 2013