National Minimum Wage

Seafarers
Chapter 4: Compliance and Operation of the National Minimum Wage
4.59 Seafarers are covered by the minimum wage when they are employed to work on a ship
while it is in the UK or its internal waters, regardless of where the ship is registered.
In addition, a seafarer working on a ship registered in the UK must be paid the minimum
wage wherever in the world that ship may be, unless:
●● all the work takes place outside the UK (and its internal waters); or
●● they are not normally resident in the UK and the ship is outside the UK (and its internal
waters).
4.60 In last year’s report, we advised that the Government had convened a working party to
consider the legal position on the application of the NMW to non-UK registered ships
travelling between UK ports. We encouraged all parties to continue with their dialogue to try
to resolve the issue. Following a ruling by the Court of Appeal in 2011 it is possible that the
NMW may be applied to workers on non-UK flagged ships where it can be shown they have
a jurisdictional link with the UK. The Government has advised it is considering this.
Accommodation Offset
4.61 Accommodation is the only benefit-in-kind that can count towards the minimum wage.
It provides a mechanism to enable employers to offset the cost of providing accommodation
for workers against the minimum wage, up to a maximum daily limit that has risen over time
broadly in line with increases in the adult rate. Offset arrangements provide protection to the
worker and give some recognition of the value of the benefit, but are not intended to reflect
the actual costs of provision to the employer or the commercial market value of the
accommodation.
4.62 When it was initially recommended, an offset for accommodation was designed to be a
protective measure. The Commission’s intention was to discourage employers both from
levying excessive accommodation charges and from withdrawing the provision of
accommodation, which Commissioners recognised would affect the most vulnerable
workers.
4.63 Since its introduction, we have commented on the evidence received in relation to the offset:
mainly from employers’ representatives that the level was too low and from workers’
representatives that it should be held down in order to protect low-paid workers. We have
consistently maintained our rationale for the offset and have recommended increases in line
with those for the adult rate of the NMW.
4.64 For our last report employer organisations informed us that the level of the offset was too
low and it was therefore uneconomical for their members to provide accommodation. Trade
unions thought that the offset arrangements continued to be misused. We concluded that
although the arrangements were far from ideal, they had been maintained for three main
reasons: to provide protection to workers; to provide some level of recognition of the value
and cost of accommodation; and to keep the system simple to administer and therefore
enforce.
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