National Minimum Wage

National Minimum Wage
4.32 Some stakeholders thought that given the evidence of
abuse of hotel cleaners, there were grounds for “There are a number of dubious
scrapping the FPR arrangement, or at least excluding practices in hotel cleaning,
its use in the hotel sector. The TUC said that while it including unpaid ‘training
regarded the minimum wage as one of the simpler weeks’; short-term workers
employment rights, it was concerned that there was a not getting paid if they had
problem with certain employers actively trying to
worked for less than two weeks;
create loopholes. It thought that FPRs were an area
wage slips not recording hours
which might constitute an unnecessary complication
or calculations of pay; abuse
to the wage arrangements. The TUC said abuse of
piece rates in hotel room cleaning had continued and
of piece rates; and bogus
that this type of arrangement had spread to other self-employment.”
sectors such as parcel delivery and fast food delivery.
Unite oral evidence
It had not been able to find any evidence that these
employers had used time trials to establish a Fair
Piece Rate. The TUC concluded that these provisions
were more regularly abused than properly used and questioned whether FPRs should be
retained. In oral evidence it asked us to consider whether there could be a tightening of the
defined circumstances where piece rates may be used. Unite called for the removal of the
FPR system from the hotel sector. In oral evidence it told us of a range of dubious practices
by unscrupulous agencies, which included abuse of piece rates.
4.33 Some employer organisations have also called for reform of the FPR arrangements. Under
the Agricultural Wages Order the employer must make pay up to at least the hourly rate of
the Agricultural Minimum Wage for all workers, including those being paid piece rates. An
NFU survey suggested that 8.5 per cent of workers in horticulture (where it estimated 80 per
cent of seasonal workers were on piece rates) had their pay ‘topped up’. NFU said that with
the removal of the Agricultural Wages Board for England and Wales it was probable that
agricultural employers would seek to adopt a FPR, but it thought they should be allowed to
set hours when picked items were submitted. The UK Fashion and Textile Association (UKFT)
was concerned at the effect on incentives of a continued rise in the proportion of piece rate
workers having their pay made up to the level of the minimum wage.
4.34 We carefully considered the calls from some stakeholders for reform of FPRs in light of
evidence of abuse of piece rate arrangements in hotel cleaning. However, we doubted it
would change the situation faced by these workers. Reform or removal of FPRs would
probably not affect the employers in question because we have no evidence that their pay
arrangements were attempting to conform to the requirements of FPRs. In sectors where
workers’ hours are controlled, including hotel cleaning, even where a piece rate system is
operated the worker must be paid at least the minimum wage for every hour they work.
Even if FPRs were abolished employers would face the same test as now: whether they
have paid the workers at least the minimum wage for all the hours worked. Scrapping FPRs
would, however, remove the most appropriate means of assessing NMW compliance from
those homeworkers paid by reference to the number of pieces they produce in
circumstances where employers cannot control their hours. We also did not support
108