National Minimum Wage

National Minimum Wage
4.65 We have heard evidence along similar lines for this report. Northern Ireland Hotels Federation
advised in written evidence, and during our visit to Belfast, that consideration should be given
to other benefits provided to employees, such as meals, when recommending the NMW
rates. BHA, BBPA and BISL again contended that the level of the offset was below the
economic rate for what was being provided, equating now to only about a third of the market
value. This message was also given by ALP during oral evidence who said that, as a result,
most of its members no longer provided accommodation. The ALMR said the low level of the
offset was having an adverse effect on the provision of accommodation and the current
disparity between the offset and what would be available commercially acted as a
disincentive to employers to provide accommodation.
4.66 An NFU survey in 2011 found that the average cost of
providing accommodation in agriculture was £5.62 a
day (an increase of 6.6 per cent on 2010). It also found
that 43 per cent of farm workers had a tied cottage
and 15 per cent had another type of accommodation.
During a visit to Cornwall, Winchester Growers told us
that the level of the offset was no longer in line with
reality. It favoured a system where local councils
would be the source of ‘fair rent’ information and the
Gangmasters Licensing Authority (GLA) would monitor
and ensure that workers were only charged an
amount that was fair and could be demonstrated to be
in line with the true cost.
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“It is likely that a substantial
increase in the offset will
yield better reinvestment in
accommodation. Better quality
accommodation is likely to
encourage more domestic
workers into farming.”
NFU evidence
4.67 Kalayaan, a charity supporting migrant domestic workers, supported the offset saying it
provided a vital basic protection to workers, many of whom were vulnerable, and should, as
a minimum, remain in place. Ideally it would like to see any deduction for accommodation
confined to monies earned in excess of the NMW. Unite said abuse of the accommodation
offset had led to many workers, in particular migrant workers, being paid below the NMW.
It also noted that the offset had risen previously in line with increases in the adult NMW,
and supported a similar approach this year.
4.68 During two of our visits, discussions with employers have shown that there is not a clear
understanding of the offset rules and that advice on Business Link is not as clear as it could
be. Previous guidance issued by the Department for Trade and Industry (in 2007) is no longer
available and in order to remove any current confusion, we believe this (or similar) more
detailed guidance should be re-issued (see paragraphs 4.54 and 4.55).
4.69 We have very little robust evidence to show how far the offset is protecting low-paid
workers; how far its level may be depriving them of accommodation that would
otherwise be offered; and how far it may have led to changes, if any, in the provision of
accommodation. We also have little evidence about how far the arrangements are being
abused (figures from HMRC show that 6 per cent of non-compliant cases (68 cases) in
2010/11 related to the offset).