A measure that could affect the pay of significant numbers of workers employed in private households has been introduced into Parliament in the form of draft regulations removing the ‘family worker’ exemption from the National Minimum Wage (‘NMW’) legislation. The new rules are expected to come into force in April 2024.
The current NMW for those aged 18 to 20 is £7.49 an hour, increasing to £10.18 for those aged 21-22 and £10.42 for those 23 and over (this figure is referred to as the ‘National Living Wage’). There is currently an exemption from paying the minimum rates that applies to domestic workers who live in the employer’s family home and are treated as members of the family. The exemption applies to those who are provided with accommodation and meals and the sharing of tasks and leisure activities, and where there is no deduction from wages for food or accommodation. The original intention was that the exemption applied to au pairs, nannies and companions but there is evidence that the exemption has been used far more widely and has led to exploitation in some cases.
In October 2021, the Low Pay Commission recommended that the exemption be removed following an Employment Tribunal decision that the exemption is indirectly discriminatory against women, a decision recently upheld by the Employment Appeal Tribunal. The Government has now responded by introducing legislation to end the exemption.
A domestic worker aged over 23, employed to work 40 hours a week in 2023/2024, could expect to be paid a minimum of £21,673.60 a year, in addition to their board and lodging, although a modest amount can be deducted for the provision of accommodation (£9.10 per day or £63.70 per week in 2023/2024).
The NMW exemption will continue to apply to actual members of the family in respect of domestic duties where the worker resides at home.
For further information, please contact:
Meriel Schindler, Partner, Withersworldwide