Dealers have reportedly expressed their concerns that the new National Living Wage will mean enforcing pay and benefits cuts.
On April 1 the National Living Wage was increased to £7.20 from £6.75 for workers aged 25 and older.
“The NFDA is concerned with the new National Living Wage and the impacts that it might have on businesses”, said Sue Robinson, director of the National Franchised Dealers Association, which represents UK commercial vehicle and franchised car retailers.
“Several employers have already raised concerns and are now looking for other ways to cut wage bills, including reducing overtime and bonuses, and cutting employee benefits.
“We do believe that employees must be properly rewarded and it is concerning that businesses looking for ways to counterbalance this rise in costs can resort to job losses or reducing staff working hours.”
The average salary for permanent staff in the UK decreased by -3.4% overall and by -8.9% in sectors such as retail, the NFDA says.
At the same time temporary and contract staff at employment agencies reached a 13-month high in April, according to the latest figures from jobs site CV-Library and the Recruitment and Employment Confederation.
“It can be challenging, in particular for small businesses, to grow and to cope with these changes especially in a long term perspective,” Robinson said.