Julia Hartley-Brewer in the Spectator:-
And this is where we get to the truth. Because not only does an employer enjoy far lower bills for holiday and sick pay entitlements, as well as pension contributions, for zero hours and part-time employers, they enjoy other benefits too. The employer’s National Insurance contribution liability doesn’t kick in until an employee earns £156 or more per week, so many companies now ensure they limit employees’ hours to below that threshold. When extra hours are available, instead of offering more hours to existing part-time staff, some of whom are desperate for full-time work, these companies simply hire more zero-hours or part-time staff.
And what's her solution?
If Ed Miliband or David Cameron really want to tackle the dark side of zero hours contracts, they should pledge to impose a legal limit on the percentage of staff that any company can employ on zero hours contracts. That maximum should not exceed 10 or 20 per cent, which allows ample room for flexibility. After all, when companies pay less in tax and NICS, the Treasury loses out on vital funds. And when people can’t get the full-time work and job security they want, it is taxpayers who end up footing the bill for their tax credits and housing benefit to make ends meet. That means less money going in to Treasury coffers and more money going out.
Why so complicated? Apart from the fact that cafes and cinemas have a lot of "peak" staff and a few staff with regular hours, why not just scrap employer's NI and just stick it on income tax? Or worse, set the floor to £0.
Debate Magazine
