3.5.3 - Wage determination in competitive and non competitive markets

Question 1

What is a zero hours contract ?

Answer 1

• They allow employers to hire staff with no guarantee of work
• They mean employees work only when they are needed by employers, often at a short notice.

Question 2

Is sick pay included in a zero hours contract ?

Answer 2

No

Question 3

Why do employers use zero hour contracts ?

Answer 3

Employers say that zero hour contracts allow them to take on staff in response to fluctuating demand for their services, in sectors such as tourism and hospitality

Question 4

What is a benefit to workers of zero hour contracts ?

Answer 4

Workers can work more flexibly

Question 5

Why do zero contracts reduce the financial stability of workers ?

Answer 5

• They do not have the same employment rights as those on traditional contracts
• They can be used as a management tool - offering more hours to favoured employees and less to those that are less valued

Question 6

What is pay discrimination ?

Answer 6

Pay discrimination refers to people who do the same job, or jobs of similar value, being paid differently

This has been illegal since 1975

Question 7

What are the reasons behind the ethnic pay gap in Britain?

Answer 7

People from ethnic minorities are more likely to work in low skilled, low paid jobs

Another factor is age. People from ethnic minorities tend to be younger that the white britons and therefore at an earlier stage in their career

Question 8

What is the apprenticeship levy?

Answer 8

The Apprenticeship Levy is a UK tax on employers which is used to fund apprenticeship training.

Introduced at the start of the 2017/18 tax year, it is payable by all employers with an annual pay bill of more than £3 million, at a rate of 0.5% of their total pay bill.

Question 9

What is the purpose of the apprenticeship levy ?

Answer 9

The levy is there to fund apprenticeship training for all employers.

Question 10

What are the downsides to the apprenticeship levy?

Answer 10

If you do not pay the levy you cant use the training programme

The levy is not easily understood and complex

Question 11

What pressures are being placed on people to delay their retirement?

Answer 11

• You can have more flexible hours, means they stay in work and are incentivised to do so
• Will increase the time people work and raise the retirement age

Question 12

What reforms can be used to ease the pressure on people to delay their retirements ?

Answer 12

• Retrain the older population
• Part time jobs - gives them more flexibility - gives people more social interaction and this is good for mental and social wellbeing
• Social gatherings - encourages them to want to work together
• Lack of barriers and make more information available