The Equestrian Employers Association (EEA) is urging yards to look at their business models ahead of a hike in the minimum wage.
The national living wage, the minimum legal hourly pay for workers aged 25 and over, and national minimum wages for all younger age brackets will increase on 1 April.
The living wage will rise by 6.2%, from £8.21 to £8.72 per hour — which the government says is the “biggest cash increase ever” — with increases of between 4.6% and 6.5% for younger workers on the minimum wage, dependent on their age.
“It is absolutely right that everyone is paid fairly,” said EEA president Tullis Matson. “However, in some cases equestrian businesses are already struggling; this rise will be a challenge for them. It’s vital increases in the living wage are manageable and do not put jobs at risk.“This government has promised a reduction in the jobs tax through an increase in the employment allowance [money off an employer’s national insurance bill]. With a living wage increase of this size now on the horizon, it’s critical that it delivers swiftly.
“As a small employer, equestrian businesses must consider a rise in their prices in response to living wage increase of this magnitude. There needs to be an industry-wide increase, the employer cannot be tasked with this on their own.”
A statement from the EEA said HMRC is “certainly targeting the equestrian industry” with “hefty fines being issued” for non-compliance.
“The EEA is concerned about the impact on many equestrian business, remembering that it’s not a choice to pay [at least] the minimum wage [for the relevant age], it’s the law,” said an EEA spokesman.
“For a groom working a 50-hour week, this will be an annual pay rise of £1,326.”
The EEA has also questioned whether the Conservative Party’s pledge to raise the living wage to £10.50 an hour for everyone over 21 by 2024 is sustainable for an equestrian business. The EEA has worked out that a yard employing four staff — across four of the five minimum and living wage age brackets — on a 50-hour week, could result in an increase in staffing costs of around £4,500 per year.
On the other side, provided the rise does not result in job or hour cuts, employees on the living wage working a 35-hour week will be better off to the tune of around £930 a year under the proposal.
Hubbards Hall Livery’s Mike Hallows, who will be speaking at the first EEA conference in Shropshire on 25 February, told H&H those who pay for services, such as livery, need to realise the financial impact and why costs may rise.
“It isn’t because the [business] owners or the business are getting more out of it, it is covering our costs and people have to realise that they need to be prepared to pay enough for livery so that we can pay to provide it,” he said.
He added the impact for individuals will all depend on each person’s business models and where money comes from to bankroll that. For example, if an equestrian business is entirely self-sufficient — relying totally on money coming in from the services it provides — the increase may have a different effect to a business that has a substantial amount of capital invested from another source.
An independent think-tank report has raised concerns over the rapid emergence of “fake apprenticeships” diluting the apprenticeship brand as a whole, but the equine world has been reassured this is not the case in the equestrian industry.
Chris Hewlett, managing director of apprenticeship training provider Haddon Training and chairman of the British Grooms Association, told H&H the report’s finding “generally doesn’t apply to the equine industry”, but issues are found more within the business sector and are being “stamped out”.
He added apprenticeships and the way they are run have become much more transparent, with personal learning records and final assessments.
“There are some challenges within the [equine] industry,” he said. “For example, if someone does their BHS stage two, they cannot then come and do an apprenticeship level two [on a similar subject].”
He added this, combined with a lack of careers advice in schools, can lead to innocent mistakes and people having to be turned away from possible positions.
An overhaul of apprenticeships happened in 2017, with the changes in the equine sector coming into force around 16 months ago. This means the first cohort under the new scheme have only recently finished their 12-month positions, and feedback so far has been positive.
“It is a much more stringent product,” said Mr Hewlett, adding there were teething problems, but it is working well. “People have enjoyed the experience and employers think it is more fit for purpose.
“The minimum wage increase is a challenge for the equine industry, and will put pressure points on businesses to survive and training providers to make sure that people are genuinely [employed in apprenticeship positions].
“Apprenticeships are a fantastic tool in developing the next generation of staff — there is no better way to develop those skills than on the job.
“The backbone of the industry is the work force. For all the medals, behind all of that, there is a really hard working team.”
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