Low Pay Commissioners visit the ‘city of a thousand trades
23 August 2018
The CIPP and some of our full members met with the Commissioners last week in Birmingham and in their latest blog they share their reflections on what they heard from all the businesses and individuals they met with.
Commissioners Clare Chapman, Kay Carberry, Kate Bell and Martin McTague visited Birmingham last week to gather evidence on the effects of the National Living Wage and Minimum Wage. Below are some excerpts; the full blog is well worth a read also.
“…You may wonder what role this trip to Birmingham (and those we do across the U.K. during each year) have to play in the way the nine Low Pay Commissioners prepare ourselves to make recommendations to government on Minimum and Living Wage rates. For sure we get access to the best economic and social data. Of course, we receive all the evidence submitted to us in writing and in the formal face to face evidence sessions with practitioners and academics. But in truth the real-life experiences of those in low paid work and of those employers in low paying sectors are hard to understand just from the statistics and the evidence alone. These trips are vital therefore to ensure that Commissioners stay in touch with what's working and what still needs attention - sometimes even before these messages formally show up in the statistics….”
“…It is now generally accepted that the introduction of the National Living Wage rate has led to the largest fall in numbers of those in low pay for decades. We also know that whilst there is still abuse in the rough end of the labour market, in the 'visible' economy the introduction of the National Minimum Wage has all but eliminated extreme low pay. But there is no room for complacency because there is much left to do.
There are still big obstacles to overcome with over 4 million people still expected to be in low pay in 2020. Our discussions in Birmingham made personal for us what we already know from the evidence about the big structural obstacles we all need to address in Britain:
- that over a third of part-time employees are low paid (vs. half as many full-time employees);
- that most of low paid employees are unlikely to progress out of low paying jobs (and it is significantly worse for women with 22% of women falling below low pay thresholds vs. half as many men);
- that around 15% of workers paid within 50p of the NLW are looking for more hours - double the rate for all workers. Employees in low paying sectors are often looking for more hours than they are offered and for some, zero hour and short hour contracts and unpredictable shifts confirmed at the last-minute make life difficult…”
It was good to see that enforcement was mentioned and the importance of improved guidance:
“…The Low Pay Commission welcomes the vigour of HMRC compliance activity. All employers confirmed that those who are not compliant with low pay rules should be held firmly to account, and we know that there are deliberate under-payers out there. But we heard complaints from employers and their advisers about what they perceived of as heavy-handed investigations where genuine benefits to employees were being removed. For example, employers were not convinced by HMRC's interpretation of the rules on salary sacrifice schemes, and a lack of clarity and consistency on guidance is leading to unnecessary confusion and cost. We will be exploring this when we meet with HMRC.”
Read the full blog on the ‘Low Pay Commissioners visit the ‘city of a thousand trades’.