In fact, despite neither party having a crystal ball as to what would really happen, it is now accepted that the NMW’s protection vastly outweighs its effect on unemployment figures. A 2006 study by the London School of Economics found that:

The consensus is that the minimum wage has not cost jobs, either in the aggregate economy or in the low wage industries and occupations.

..despite this outcome being contrary to the predictions of conventional economic theory. Read a summary of the study here:

http://cep.lse.ac.uk/pubs/download/CP217.pdf

David Cameron, and the coalition government, are cautious converts to the NMW, and have accepted the proposals of the Low Pay Commission that rates be increased as follows, effective 1st October 2010:

New National Minimum Wage rates

• Adult rate: £5.93 (up from £5.80)
• Development rate: £4.92 (up from £4.83)
• 16-17 year old rate: £3.64 (up from £3.57)
• Apprenticeship rate: £2.50

Note that the Adult rate now applies from age 21 instead of 22. The Development rate thus applies to 18, 19 and twenty-year-olds. The apprenticeship rate is a new development – a 37 hour week would now pay £92.50. There was already a de facto minimum of £95 per week, but the introduction of an hourly rate is designed to stop abuses of apprentices by having them work excessive hours.

It’s been widely reported that restaurants may be compelled by legislation to reveal to their customers whether or not tips go directly to serving staff. What’s not been made so clear is the tandem proposal to remove the current provision whereby tips received by staff may count towards their national minimum wage entitlement. The BERR consultation is here, but I’ll be surprised if this doesn’t go through – reducing wages pro rata to tips received is not easily defensible given the British attitude that tips are a reward to the individual waiting staff for service beyond the average.

This type of arrangement is common, and furthermore is very useful. Many care homes are too small to employ sufficient waking night staff to deal with all situations that might arise. Mrs Hughes was called out around twice each month. Relations must have soured however, as she raised a grievance. Her employer’s response was to pay her for the time she was working during the call outs. However, whether due to this grievance or a further deterioration in the relations, they served notice to quit from the flat. This was constructive dismissal, so closely were the flat occupation and employment relationship tied.

She also brought actions claiming that she should be entitled to National Minimum Wage for the on call periods (9pm to 8am), and breach of her Working Time Regulations entitlements to rest breaks every six hours, and daily rest breaks. She won on most points: it has been established since the ECJ cases of SIMAP and Jaeger (all about junior doctors) that if you’re required to be on the premises then it’s working time, even if you’re asleep. The NMW is only payable when you’re awake. For a similar decision with a hotel caretaker required to stay in the hotel on some nights, see this case.

The present case of Hughes v Jones & Anor [2008] UKEAT can be found here, and the law is certainly correctly interpreted, but it’s a shame that employing live-in on call staff is effectively rendered impossible by the WTR.

• £5.73 per hour for workers aged 22 and over;
• £4.77 for 18 – 21 year olds;
• £3.53 for those aged 16 and 17.

Please see my recent related posts for more detail:

1. Minimum Wage Hike
2. National Minimum Wage changes – full rate for 21 year olds?
3. Apprentices – NMW
4. Successful National Minimum Wage prosecution

The establishment of the Board, together with the introduction of a single telephone helpline to report sharp practice by employers, has been announced in this BERR press release.

A summary of the new measures is given:

1. Establishing a Fair Employment Enforcement Board to drive continued progress towards effective collaboration between enforcement bodies including HMRC, the Employment Agencies Standards Inspectorate (EAS), the Gangmasters Licensing Authority and the Health and Safety Executive.
2. A single telephone helpline to report abuses;
3. The launch of a sustained campaign to raise awareness of employment rights issues and to encourage reporting;
4. New legislation to empower joint agency working and information gathering;
5. A boost to the Employment Agencies Standards Inspectorate, including a doubling of the number of inspectors and an awareness-raising campaign.

These changes are in addition to the new NMW powers in the forthcoming Employment Bill.

I can’t help but applaud these changes – the variety of enforcement agencies can be confusing to professionals, let alone lay people. Now when will something similar exist for employers?

Also, the government will amend legislation so that tips and gratuities paid to staff do not count towards the NMW. There were always two arguments on this one; some say that the goal of the law is to ensure that staff earn a certain amount from their jobs, and that there is no reason why tips should not be part of this. The other viewpoint is that tips are, by their nature, in recognition of someone going beyond their normal (and contractual) duties.

I remember in the book Down and Out in Paris and London, all the senior waiters at the top Paris hotel where Orwell works are paid by tips alone. I do not know if this remains standard practice anywhere. I also do not know if the lot of a plongeur has changed:

[A] plongeur is one of the slaves of the modern world. Not that there is any need to whine over him, for he is better off than many manual workers, but still, he is no freer than if he were bought and sold. His work is servile and without art; he is paid just enough to keep him alive; his only holiday is the sack… [they have] been trapped by a routine which makes thought impossible. If plongeurs thought at all, they would long ago have formed a union and gone on strike for better treatment. But they do not think, because they have no leisure for it; their life has made slaves of them.

Given that underpaid workers have a civil remedy in the tribunals, and that the NMW enforcement team are (so I hear) happy to deal with minor infringements without recourse to prosecutions, their conduct must have been brazen to get as far as this. The HMRC press release is here. Anyone else think that a combined fine of £800 is a bit on the light side? It may well be that when they’ve paid the arrears/compensation they’ve not much left in the pot to pay any larger fine anyway.

The Low Pay Commission – an independent body which advises the government on the National Minimum Wage – has recommended ever since the inception of the NMW that the adult bracket be brought down to 21 years old. Each time they’ve been knocked back by government statistics that the Commission say actually proves their point rather nicely. From this year’s report (their emphasis):

We believe that the latest evidence reinforces our view that lowering the entitlement to the adult rate to the age of 21 will not have a detrimental impact on their employment prospects and therefore recommend again that 21 year olds should be entitled to the adult rate of the National Minimum Wage. Should the Government maintain its opposition to this proposal, we would welcome an indication of the exact nature of its opposition and a specification of what would need to change for the Government to adopt a positive approach to this recommendation.