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Firms want red tape reduced on complicated employment laws

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Britain’s employment laws could be damaging small business, according to new market research.

When asked whether current employment law affected their decision to hire more staff, 39 per cent of small businesses said they would if employment law was made simpler.

Just 25 per cent of respondents claimed it was acceptable in its present state, with a lack of understanding leaving them at risk of making serious errors, which could result in financial penalties.

Three-quarters of respondents to the Citrus HR survey admitted keeping abreast of UK employment legislation was a “significant drain on their time”.

The report also found that up to 30 per cent of employers don’t know the current National Minimum Wage, which can incur fines as high as £20,000 – while 18 per cent don’t know which countries are in the EU, meaning they may not have checked whether new workers are eligible to work in the UK.

Some of the most difficult employment tasks mentioned by respondents included calculating holiday for part-time staff and those working “casual hours contracts”.

Changes to flexible working rules was another common answer when respondents were asked for examples of a recent legislative change that had made small business employment law compliance more complex.

The fact that you aren’t allowed to pay people for unused holiday unless they leave was listed as the law employers most want to change (37 per cent), followed by the removal of the compulsory retirement age (29 per cent), the ability for people who fall ill on holiday to claim it as sick leave (21 per cent) and women on maternity leave continuing to accrue paid holiday whilst not actually in work (14 per cent).

The Government has previously said it will be doing everything it can to “axe unnecessary regulation and its poor implementation” by up to £10bn during the five-year period of this parliament.

Sajid Javid, Business Secretary, said: “I’m determined to take the brakes off British businesses and set them free from heavy-handed regulators.

“The government’s pledge to cut £10bn in red tape over the course of this parliament will help create more jobs for working people, boost productivity and keep our economy growing.

“For the first time, these reviews will look not only at the rules themselves, but [how] they’re enforced. We want firms to tell us where red tape is holding them back.”