Canteen staff at the Department for Business, Energy and Industrial Strategy (BEIS) have staged their sixth day of strike action this year over low pay, as the department was caught up in the controversy surrounding the outsourcing company ISS, which is withholding wages while it switches to a new payroll system.

Cleaners, security guards, post-room staff and porters were told they could take out bridging loans to cover living costs after the company, taken on by the department in February, declared it was only going to pay them half their usual wages in their next pay cheque.

It is a fresh embarrassment for the business secretary, Greg Clark, whose department is supposed to be negotiating with unions over workers’ rights after Brexit but employs some of the most poorly paid outsourced workers in the country at its headquarters in Westminster.

Outside the BEIS building on Victoria Street on Wednesday, catering staff employed by Aramark, some of whom were paid the minimum wage until recently, joined a picket line where they danced, sang and chanted for better pay.

They have rejected an offer to increase their pay to £9.01 an hour and modest improvements to sickness and holiday pay as well below their demand of £10.55 – the London living wage – and parity in contractual terms with the civil servants they work alongside.

Previously they had been joined on strike by security guards, porters and other support staff, but those workers had lost their mandate for industrial action when ISS took over their contract.

“With that 1p I’m going to buy a house, maybe a Ferrari,” one striking canteen worker deadpanned. Rent, council tax, water rates and travel to work accounted for most of her income, she said. “If we put in electricity and gas we don’t eat.”

She and her colleagues work eight-hour days with a half-hour break for lunch. They are entitled to a free meal, but only if they choose the cheapest option on the menu. “There’s rumours that if we do get the pay rise we will have to pay for our own food.”

Mark Serwotka, general secretary of the Public and Commercial Services Union, which represents government workers, told the workers the union would continue with them if they decided to escalate their dispute. There were suggestions among workers that they could even choose to go on all-out strike.

“If they don’t [accept the demands] we are just going to press on with it,” said one worker. “We’ve no intention of settling for anything less than £10.55, because they can pay and that is the living wage.”

A source close to the dispute said: “They are trying to say that the pay rise they are offering is the average for people in London that do this job – but that’s not the London living wage, that’s the key. They are trying to obfuscate the situation. Our members want the living wage – that’s not a king’s ransom.

“This is a government department. We shouldn’t be looking to the private sector, we should be looking to the public sector; so we want it brought back in house.”

A BEIS spokesperson said: “All our staff are valued members of the BEIS team and all deserve a fair wage, whether directly employed or working for our contractors.

“Following a review of contractor pay by the department, we have agreed with our contractors that they will align the pay of cleaning, catering, mail room and security staff to the median rates for those occupations as identified in the annual survey of hours and earnings.”