Not so Equal: National Minimum Wage Exemption to be Removed
The UK government is planning to remove an exemption from the national minimum wage which currently applies to domestic workers living in the employer’s home who are treated as family members
A current exemption from the national minimum wage (NMW) states that employees do not have to be paid the NMW if they live in the employer’s household and are treated as a family member. For example, if the employer provides accommodation and food free of charge. The exemption largely covers au pairs, nannies, and companions.
Purpose and Failure of the Exemption
The exemption was originally introduced to facilitate affordable au pair placements, in which the au pair would help with childcare and limited housework and in return earn pocket money, board and food and the opportunity to learn English while being treated as a family member. Its purpose was to allow a cultural exchange, working alongside the regulated au pair visa.
However, in 2008, the au pair visa was removed and with it, the regulation of the sector. Without regulation and enforcement of standards, au pairs have been found to be working long hours, undertaking work far beyond the scope of childcare and light housework and having limited opportunities to learn English whilst still being covered by the exemption from NMW. Further, while the exemption was intended to apply to au pairs and nannies, the legislation did not define the exemption as applying solely to these roles. As such, the exemption’s scope also includes any domestic worker who is working for a household as a housekeeper or carer if they live with their employer and receive accommodation and meals for free.
Time for Change
In the 2020 case of Ms K Puthenveetil v Mr S Alexander and Ms R George, the Employment Tribunal found that, as domestic workers are significantly more likely to be female, the exemption was indirectly discriminatory. Indeed, the Low Pay Commission found that around 90 per cent of workers likely to be affected by the exemption are female and that the majority of families specify they want female au pairs in their adverts. The Commission found that there is a belief that the conceptualisation of domestic workers as family members relies on the idea that this work would otherwise be provided for free by women in the family.
In October 2021, the Low Pay Commission recommended that the exemption be removed. Following this recommendation, the draft National Minimum Wage (amendment) (No. 2) Regulations 2023 have been laid before Parliament. Once approved, the Regulations will remove the family worker exemption by repealing Reg 57(3) of the 2015 Regulations.
The change is expected to come into force on 1 April 2024. From this date, live-in domestic workers, such as au pairs and nannies, must be paid the NMW, which is set to increase to £11 per hour from April 2024. This does not remove the exemption from NMW for actual family members in respect of domestic duties where the worker resides at home.
If you would like advice on whether or how this change may affect you, please get in touch at [email protected]
