Small business insurance holders should be allowed to negotiate pay levels with individuals, rather than have standards dictated to them by others, it has been suggested.
John Wright, national chairman of the Federation of Small Businesses (FSB), claimed that a "one-size-fits-all pay rise" may not be the most useful strategy in the current economic climate.
He also said that it is good the Low Pay Commission increased the minimum wage by seven pence this week, but pointed out that it will still add to the costs facing small business insurance holders who are struggling.
Mr Wright commented: "The minimum wage increase will add hundreds of pounds to the employer's wage bills and could lead to employers having to reduce hours and possibly even cause further redundancies."
Recently, the Confederation of British Industry said that the 1.2 per cent increase in the minimum wage is "sensible" and works to improve conditions for low-paid workers while protecting jobs offered by business insurance holders.
