The government's Make Work Pay Bill lacks a pro-growth element and will increase economic inactivity, the Federation of Small Businesses (FSB) has warned.
The business group says that the legislation, particularly around day one dismissal rights, risks deterring small employers from taking a chance on someone who has had a significant period out of the workplace, shutting those doors and deepening social exclusion
It warns that the Bill is rushed and poorly planned while dropping 28 new measures onto small business employers all at once leaves them scrambling to make sense of it all.
There are already 65,000 fewer payroll jobs since Labour took power, and the new government is sending out a 'troubling signal to businesses and investors', the FSB adds.
Tina McKenzie, Policy Chair at the FSB, said:
'The Chancellor has the opportunity to lead the way in adding a pro-business, pro-employment element to Make Work Pay in her upcoming Budget. This should include a rise in the Employment Allowance, pegging it to future rises in the National Living Wage. It should also include the reintroduction of the small business rebate for Statutory Sick Pay.
'Sufficient time should be taken to avoid this becoming a hastily cobbled-together Act of Parliament. We look forward to more engagement and the start of a full consultation on each individual measure to ensure the voice of small employers is heard.'
Internet links: FSB