- 20 Sep 2023
- •
- 2 min read
Employment Alert - National Minimum Wage Exemption for Domestic Workers
What’s happening?
Parliament is currently considering draft legislation which would remove the national minimum wage exemption for domestic workers.
Currently, live-in domestic workers have no entitlement to national minimum wage for domestic work if they live in the employer’s home, share in family meals and leisure activities, have accommodation and meals for free, and the work is of such a kind that an actual family member would not be paid for it.
The changes come as a result of an Employment Appeal Tribunal finding that the exemption was indirectly discriminatory against women since women are more likely than men to work in applicable domestic roles (such as nannies and au pairs).
The amendments would see this exemption removed for non-family workers, (although the exemption would still apply for actual family members).
Why is this important?
The Government has not conducted a full impact assessment for this change but it has stated that it is likely to entail some costs for business with a net impact of below £5 million per year.
If you currently rely on this exemption, you will likely see increased wage costs next financial year and may need to make contract amendments to remain compliant with the legislation.
What should you do?
Whilst the legislation is currently in draft form, the change is expected to come into force on 1 April 2024. Therefore, if you currently rely on the exemption, you may wish to prepare for the changes by considering the additional costs you may incur as a result of this change. Also, you may want to prepare by amending workers’ contracts to reflect the national minimum wage rates in readiness for when it is actually implemented.
More generally, employers should ensure that they actively consider indirect discrimination when reviewing or implementing policies or promotion criterion in the workplace to minimise the risk of claims.
If you would like to talk to our expert Employment team, please please call us on 0800 2800 421 or contact us using the form below.
