Minimum Wage: Enforcement and Apprenticeships Deborah Littman UNISON

How does the UK minimum wage work? Low Pay Commission used to recommend a rate Rate varied by age, but not by region or sector All ‘workers’ covered Very few exceptions or exemptions

How is the minimum wage enforced? Enforcement agency = the HMRC Employer must prove they are paying the minimum wage Enforcement agency has wide powers to examine records, investigate complaints and target potential violators.

Strengths and weaknesses of NMW Enforcement Plus zHMRC relatively well resourced zClose collaboration with TUC zPenalties and powers recently increased Minus Fear of workers to make complaints Employers strategies to avoid payment and penalties Exemptions create loopholes

Enforcement issues Underpayment Under recording of hours Unlawful deductions Up-front fees Accommodation off-set Tips

Enforcement issues 2 Agencies Recovery of arrears Right to take group cases to Tribunal

Ambiguous status Domestic workers Self-employed Home workers Voluntary workers Unpaid work experience Seafarers Apprentices

Barriers to enforcement Limited remit for HMRC Information sharing HMRC can’t take cases to ET

Improvements to enforcement Wider powers for HMRC Information sharing between agencies Higher arrears and penalties

Employment Act 2008 comes into force 1 April 2009 Single notice of underpayment including a civil penalty for non-compliance Arrears paid at current NMW rate Increased civil and criminal enforcement powers available to officers Offences may be tried as summary offences (Magistrates Court) or indictable offences (Crown Court – with a potentially unlimited fine) More joint working between enforcement agencies

Apprenticeships…. Leitch Review of Skills recommended big increase in places, including in public sector Apprenticeships to be offered to all year olds. National Apprenticeship Service will provide end-to-end service

Apprenticeship issues… Not covered by NMW Minimum rate now £95 a week, no enforcement mechanism – potential to use apprentices as cheap labour Quality patchy 21% weekly gender pay gap - female Apprentices receive on average £39 less a week than male apprentices

Bargaining/lobbying goals Give apprentices entitlement to NMW Bargain rate for the job, good quality apprenticeships Ensure all workers have right to training Recruit and engage apprentices in trade unions