To feel undervalued due to minimum wage increase?

[Littlebittiredoflife]

When I first started this job four years ago I was earning enough in 15 hours as if I was working 16 hours at minimum wage. This meant as a family we could access the tax free childcare scheme. However for a while I've not earned enough to access that. I'm currently earning less than what the minimum wage will be from April. I'm just feeling that my time is worth less year on year given that everything else has risen in price. I'm not sure what I can do bar finding another job, but I'm lucky I like my work and they are flexible with hours. Anyone else feeling this way?

You sum it up perfectly. Being sucked into minimum wage is demoralising. Particularly when you only earn a little above it and your responsibilities aren’t reduced in line with the reduction in your value to the company.

This is the case for most people - only they also have to work full time so notice their ‘time is worth less now’ even more

The massive bonus of only having a NMW job is that you lose nothing if you leave and get another NMW job with more hours.

This is massively insulting to people like care workers on NMW, who work really hard and who carry great responsibility (literally life and death for those who work in people's own homes), but are not valued by society or their employers.

There's plenty of jobs that are above NMW that are not more valuable than jobs that only get the minimum yet are often essential to keeping the country running - as seen during covid.

Op, what is it you’re saying, are you saying your contract says the 15 hours will always be equivalent to 16 hours minimum wage? Are you sure it says that? Or that you will always be paid above min wage?

because if it says neither of these things are spoken to then you’re getting exactly what you signed up for. And the terms haven’t changed.

you also don’t earn below minimum wage or what it will be on an hourly rate.

I understand what you want, you want 15 hours which pays the equivalent of 16 hours min wage, and you can speak to them about that. But you need to be clear when you do, about exactly what your contract says and also your hourly rate compared to the min wage. Not the 16 hours. The actual hourly rate.

I’m clearly talking about the balance of remuneration vs responsibility WITHIN companies.

I've noticed this in charity jobs now I'm job hunting. In my line of work jobs used to be around 1.2-1.5x min wage salary. Over the years min wage has risen much faster than pay increases. Which means the same level of job is only just above min wage but for far more responsibility.

I love what I do but it's also very stressful. I'm not sure it's worth it now given so little extra pay than less stressful min wage jobs.

And same charities pay their bosses top whack I've found...

The scheme has always been that its available to those that earn the equivalent of 16 hours at NMW.

The fact of the matter is that NMW has been increased such that it is now a lot more reasonable than it once was and it's pulled more jobs (that were always being paid at a more reasonable level) into NMW territory. [note the use of the word "reasonable" - it's still not a liveable wage IMO)

Your employer will have to increase your wages to the new NMW when it comes in, that much is a fact.

Therefore from April 2025, your 15 hours will earn you £183.15 per week, so £9,524 per year.

You still won't pay any income tax on that, nor any NI.

Other changes to NI means that even if NMW hadn't gone up, they'd still be paying more in NI to employ you as the government have reduced the level at which employer's NI becomes payable and increased the % they charge.

You have two options:

• ask for an extra hour's work per week.
• renegotiate your salary so that it does pay the equivalent of 16 hours NMW - this would cost the employer £635 in extra salary to you per year, plus £95 extra in employer's NI. It's an extra £0.82 per hour taking your income to £13.03 per hour instead of the NMW of £12.21.

Renegotiating your salary could mean that without further pay rises each year, you could drop out of TFC territory again, so I'd be minded to just ask for an extra hour.

Bear in mind, however, that the NMW increase will already be increasing how much they're paying you, and the change in NI also means that you'll be costing them more.

For example, if you currently earn £12 an hour, they currently pay you £9,360 per year, plus £36 in employer's NI. Total cost to them = £9,396

The increase to NMW and NI means that they'd increase your salary to £9,524 and pay £680 in employer's NI. Total cost to them = £10,204.

They're therefore already looking at a cost increase of £808 per year for someone that works 15 hours a week, so you can imagine how much their total wage bill is going to go up, especially as you say it's a charity.

If you then wanted to up your hours to 16, or renegotiate, it would cost them £10,159 in salary and £775 in NI = £10,934, so a further £730 for one hour's extra work.

I'd definitely ask, but with impacts like that, I wouldn't be surprised if they said no.

@Littlebittiredoflife

I suppose I feel like I'm being punished in three areas. One cost of living has increased, so everything costs more, two I can't access tax free childcare and three I'm being paid relatively less for my time than I was four years ago.

Most people are suffering from the increased cost of living and are being paid relatively less for their time then 4 years ago as a result. Not sure if that makes you feel better or not but it's not just you. Can you reduce your outgoings at all or increase your earnings?

How is it cheeky to use a scheme that OP was entitled to use? Her DH pays tax so someone in the household is paying tax and presumably he also needed the childcare to allow him to go to work

I have sympathy with the situation, and I don’t claim to understand the ins and outs of eligibility, but I’m a little lost as to why you can’t work one or more hours somewhere else to make it up. I would have thought you could e.g. set yourself up as a self-employed reseller on eBay for the additional hour (I would assume you’d need to make £12 a week, but that should be doable), or is it more complicated than that?

Op, you're not being punished. This is a very passive attitude to take.

TFC exists to support working people to pay for childcare. They put the min in to stop people working a handful of hours a week just to reduce their childcare bill by £2k a year.

You currently work 15 hours but need to work 16 - tell your employer this and if they won't pay more or offer another hour, get another job.