I PLEAD with business people in York and North Yorkshire to prepare NOW for the minimum wage - and if that preparation means making hard decisions about employment and your business, then so be it.

You only have to see the effect of the minimum wage on the Continent, where unemployment is far higher than in Britain, to know that these agonising decisions have to be taken. And the sooner the better.

Job losses and business closures could be the result of the national minimum wage being set at too high a figure.

What is acceptable for York as a minimum wage would be unacceptable for the London area while a minimum wage acceptable for London would create too many problems for northern businesses.

York is very much a tourist and service-based city and is having to fight hard to retain its share of the tourist market. One of the major costs of business in the tourist industry - such as hotels, bed and breakfast establishments, restaurants, - cafes and pubs is the cost of employment.

In some establishments a starting wage of £2.50 an hour is offered and gratefully accepted. In fact, this is also offered by major chains of restaurants as well as locally-based restaurants.

Should the minimum wage be pitched at £3.50 per hour, this would increase employers' costs not just by the £1 increase, but also by the costs of national insurance contributions.

It is likely, therefore, that businesses planning for the minimum wage will look to shedding jobs to ensure their own survival; those who aren't thinking about it will find the introduction of an increased minimum a great problem.

Many small businesses operate on very fine margins and, in many cases, the minimum wage will force a stark choice between redundancies or the risk of business failure.

A survey carried out by the Association of Chartered Certified Accountants (ACCA) demonstrated the general feeling that a minimum wage of anything more than £3.60 per hour would affect businesses' abilities to take on or retain employees. Some - 15 per cent - thought that a level of only £3 would affect employment.

But don't forget that the minimum wage is only the start of the problem; the bureaucratic burdens that the new legislation will impose means that businesses must put new practices and procedures into place, even if their wage levels are not affected.

Employers will have to keep records on pay levels; new regulations will prescribe what these records must contain and employees will have the right to access them. The Government will appoint enforcement officials to ensure compliance with these rules and will have the power to enter premises, demand production of records and explanations.

They can even levy fines payable to the Department of Employment on any employer who fails to pay the minimum wage.And if the employer does not keep proper records or does not co-operate with these enforcement officials they will be subject to criminal penalties.

The same small business owner/managers who work long hours for minimum returns will have to spend far more time complying with regulations than developing the business to create more job opportunities.

The ACCA survey found that 95 per cent of respondents were not preparing for the minimum wage. No surprises there because how can small businesses plan in the absence of detail, such as who the legislation will cover, how it will define wage and crucially what that minimum wage will be, whether empirical or based on age or geography?

But there are steps that can be taken now. Undertake a review of staff and wages so that when the figure is announced, the relevant facts are to hand. The rumour is that the sum will likely be between £3.50 and £4 per hour.

The review should also include - Details of bonuses and benefits received Identifying any differentials paid to take into account different levels of skill and/or responsibility Taking on new employees or trainees in the light of the impact of the minimum wage Ensuring that all wage records for at least the past year are in a form acceptable to Government officials.The Government argues that the minimum wage will create a level playing field for all businesses and prevent cowboy operators undercutting better-paying competitors.

Businesses, however, may take the view that if the minimum wage is set too high, business survival is more important than taking on apprentices and trainees. The numbers will be reduced to ensure that the minimum wage is paid but to a lesser and more elite workforce.

Ultimately, it is impossible to predict the effect until the minimum level has been set. It's a difficult balance to strike: If too low, the minimum wage will become meaningless; too high and it WILL lead to unemployment and business closures.

But there is one certainty: It's coming.

Converted for the new archive on 30 June 2000. Some images and formatting may have been lost in the conversion.