National Minimum Wage

National Minimum Wage
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physical and sexual abuse. It called for the exemption for domestic workers to be abolished
so that all domestic workers were covered by the NMW. Kalayaan, a charity supporting
MDWs, has again submitted evidence concerning the continuing abuse and exploitation of
MDWs. It said many employers argue, some successfully, in Employment Tribunals that the
individual workers were exempt from the NMW under the family worker exemption.
Kalayaan also raised the issue of the Government’s consultation on MDWs, in which the
Government proposed to either stop MDWs being allowed to come to the UK, or limit them
to a twelve month stay.
4.24 UNISON again highlighted that migrant workers were particularly at risk from exploitation.
Problems encountered by migrant workers included low wages, unclear payslips and
unauthorised deductions from wages. This was despite the strengthening of enforcement
measures. During a visit to Glasgow, Citizens Advice Scotland told us that its evidence
showed migrant workers were clearly being exploited.
4.25 All workers are entitled to the NMW unless they are covered by a specific exemption and
there are processes for individuals to follow if they have a grievance. MDW employers are
required to sign a document covering the main conditions of employment. The Domestic
Worker section of the UK Border Agency’s (UKBA) website states that an employer cannot
change the conditions of MDWs’ employment unless they agree and that MDWs must be
paid the agreed rate which must be at least the NMW.
4.26 The issue of exploitation and abuse of MDWs is one which goes beyond the NMW. In
relation to the minimum wage, abolishing the family worker exemption would adversely
affect its legitimate and useful applications, such as for au pairs. We believe that clear and
consistent guidance on relevant government websites is required which will unambiguously
show MDWs’ entitlement. The advice given to helpline operators should be updated
accordingly.
Piece Rates
4.27 The NMW framework includes arrangements to determine whether a worker paid according
to the number of items they produce has been paid at least the hourly minimum wage.
However, if the employer controls the worker’s hours, then they must make sure they pay
at least the minimum wage for each hour of work. The employer remains free to contract
with the worker to pay on a piece rate basis, but while this may determine how far pay rises
above the NMW floor it does not allow payment below it. The NMW arrangements for paying
by the piece those workers whose hours are not controlled by the employer, and for
determination of whether or not the NMW has been paid, are called ‘Fair Piece Rates’ (FPRs).
4.28 The Labour Force Survey shows that around 1 million people work at home, but this of
course covers a very wide range of occupations and only a proportion of these workers
would be paid by reference to FPRs. Homeworkers paid at or around the NMW are the group
of workers most likely to be paid using a piece rate/FPR: they are undertaking work away
from the employer’s premises and in circumstances where control of their hours would not
usually be possible. It is difficult to access information about homeworkers, a group with few
representative bodies.