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Minimum Wage: Enforcement and Apprenticeships

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?.

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Minimum Wage: Enforcement and Apprenticeships

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  1. Minimum Wage: Enforcement and Apprenticeships Deborah Littman UNISON

  2. 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

  3. 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.

  4. Plus HMRC relatively well resourced Close collaboration with TUC Penalties and powers recently increased Minus Fear of workers to make complaints Employers strategies to avoid payment and penalties Exemptions create loopholes Strengths and weaknesses of NMW Enforcement

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

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

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

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

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

  10. 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

  11. Apprenticeships…. • Leitch Review of Skills recommended big increase in places, including in public sector • Apprenticeships to be offered to all 16-19 year olds. • National Apprenticeship Service will provide end-to-end service

  12. 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

  13. 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

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