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Stronger minimum wage enforcement is urgently needed, says BECTU

BECTU flag in gold and blue BECTU wants to see stronger enforcement of national minimum wage regulations to deter irresponsible employers.

18 September 2012

The Department for Innovation Business and Skills (BIS) should sanction stronger enforcement of the national minimum wage (NMW) to discourage employers from breaking the law, says BECTU.

The call is central to the union's submission to the Low Pay Commission's (LPC) annual review of the impact of national minimum wage regulations on the economy. THe LPC is due to report in early 2013.

BECTU believes that the HMRC which, through its National Minimum Wage Compliance Unit, is charged with enforcing the NMW should be freed from the current strict rules on confidentiality which prevent it from reporting on challenges to employers who break the law.

Currently the unit only reports on its activities to the individual complainant, an approach which, BECTU believes, has the effect of letting hundreds of employers off the hook given the limited public discussion of abuses.

The National Minimum Wage Regulations were enacted in 1999; minimum wage rates for adults, under 18s and apprentices apply from 1 October each year. The creative sector is one area of the economy where massive interest in employment is abused by some employers who use workers, most of them young, without paying them.  

Naming and shaming

The union's submission also points to the commitment by BIS in January 2011 to help with enforcement by naming and shaming employers who flout the law. Next to nothing has been done to follow up this up. 

BECTU wants BIS to "renew its commitment to name and shame employers found to flout the NMW. This should occur regularly and cases in all problem sectors should be hightlighted."

BECTU believes that more openness by the HMRC and leadership from BIS would mean that "over time cynical employers across the economy would get the message that enforcement is a reality and non-compliance has consequences."

Employers advertising unpaid work should be tackled

BECTU also appeals for firmer action to uphold the law by repeating its recommendation that job advertisements should be brought within the scope of enforcement. Tackling the issue at this stage of the process would make the HMRC's Compliance Unit more effective, says BECTU.

The union's recent research into web-based advertisements for jobs in film and tv promoted by mandy.com, which is well-known for posting paid and unpaid jobs in the micro-budget sector, showed that of 110 jobs analysed 51 (46%) specified a rate of pay at or above the NMW, 13 (12%) were unclear and 46 (42%) were explicit about the work being unpaid or paid below the NMW.

BECTU is not alone in its view that identifying ads by employers which point to future illegal employment is not difficult and would boost the enforcement regime.

Inequality persists under the current system

The union's concern for enforcement is motivated not only by a fundamental belief that work should be paid but by concerns for the inequality which will continue to persist unless the problem is tackled more rigourously.

BECTU's submission states:

"We are clear that BME workers, especially young BME workers living in and round London, are affected by the trend to unpaid internships and entry-level positions. In London such young people are twice as likely as their white counterparts to come from low income households without the resources to support them while they work for free.

"They are therefore actively excluded where entry-level opportunities are dominated by unpaid positions, which in turn means that the ethnically unrepresentative profile of the film/tv workforce will continue to reproduce itself." 

Last month's BECTU new entrants survey - taken by both union members and non-members - demonstrates that unpaid work is as much a feature of early employment in the creative sectors as paid work.

More than 200 people too part: 42% reported that they had had more than 10 paid positions since starting their careers; 33% said they had had more than 10 unpaid positions.  Only 26% believed that the availability of "unpaid opportunities" helped them to develop their careers. 95% of respondents agreed that employers who fail to pay the NMW should be challenged.

BECTU has found that employers both large and small flout the law and officials believe this points to weaknesses in the current approach to enforcement. In 2011 interns working on X Factor which is produced by TalkBack Thames, part of Europe's largest television production company, were the subject of a complaint about non-payment. The case was settled this summer helped by ntervention from the HMRC with the staff receiving all the money they were due. However the settlement only came to light because one of the staff affected went public.

Martin Spence, assistant general secretary, and author of BECTU's submission to the LPC said:

"Formal reporting of the outcome of cases such as X Factor is crucial if employers are to be discouraged from breaking the law; in addition, workers who are being denied their right to even a modest income need to see that the law is genuinely on their side."

Current minimum pay rates

The current statutory minimum pay rates are set out below; the figures in brackets show adjustments from 1 October 2012:

  • An apprentice under 19, or a first year apprentice -  £2.60 per hour (£2.65 per hour)
  • Age 16-17 -  £3.68 per hour (no change for 2012/13)
  • Age 18-20  - £4.98 per hour (no change for 2012/13)
  • Age  21 +  -   £6.08 per hour (£6.19 per hour).

BECTU is backing the TUC's call for an increase in all NMW rates for 2013 by more than the rise in average earnings or RPI, whichever is the greater, and for a bigger increase than this to be applied to the apprenticeship rate.

Read BECTU's LPC submission in full

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