National Minimum Wage

Chapter 4: Compliance and Operation of the National Minimum Wage
4.29 One body which does, however, represent this group is HomeWorkers Worldwide (HWW).
In its evidence it said that the most common concerns raised by homeworkers were a lack of
work; irregularity of work; low pay; and a lack of employment rights. There were compliance
problems and HWW said its conversations with homeworkers confirmed that many on piece
rates continued to be paid below the minimum wage. HWW regarded FPRs as essential for
providing a framework for paying homeworkers the NMW. It said the FPR system recognised
the reality of those homeworkers paid by a piece rate, both in the UK and throughout the
world. It thought abuses should be tackled through proactive, well-resourced enforcement,
as well as through supporting workers to come forward to complain. HWW evidence also
highlighted a need for better guidance on FPRs; it had received calls from employers seeking
information on their obligations to homeworkers, including calculation of FPRs, and it told us
that the information which exists on Business Link was difficult to find and could be better
signposted.
4.30 For our 2010 Report we received evidence concerning hotel cleaners employed through
agencies and contract cleaning companies. They were being paid on a ‘per-room’ basis at
rates which often made it impossible for them to receive payment of at least the minimum
wage. We recommended that HMRC investigated whether these workers were receiving
their minimum wage entitlement for the hours they worked. The Government accepted this
recommendation and told us HMRC would undertake targeted enforcement in the final two
quarters of 2010/11.
4.31 In its evidence for this report, the Government told
us that HMRC had worked with the BHA to target
“CSSA members manage the
hotels in London that employed agency cleaning staff. issue [piece rates] by tracking
HMRC wrote to around 80 hotels that were using hours worked as well as ‘pieces’
hotel cleaning services provided by employment completed and thereby ensuring
agencies. A number of compliance interventions were that the NMW is not breached.”
undertaken resulting in arrears of over £33,000 being
identified for around 300 workers. HMRC also carried
Cleaning and Support Services
Association oral evidence
out a number of enquiries into employers, end users
of agency staff and contract cleaning workers. In one
case involving an agency supplying labour to over 170
hotels, HMRC successfully challenged the piece rates being used on the basis of actual
working practices and worker testimonies resulting in the payment of £19,000 of minimum
wage arrears to 30 workers. We hope HMRC will use the experience and information from
this campaign to inform future campaigns and to look at hotels outside London.
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