Kevin Rowan column

Jul 17 2006 By Kevin Rowan, The Journal

It is more than six years since the Labour Government introduced the National Minimum Wage in the face of opposition from the business community and the Tory Opposition.

Those six years have seen the wages of the lowest earners increase significantly and employment increase by two million.

The wage increase has particularly benefited our region, where pay is generally lower than the national average, and has had the biggest impact on women, who are, to an extent, in the lowest-paying jobs.

In that period there have been thousands of prosecutions against employers who have failed, often deliberately, to pay minimum rates.

There are sectors where minimum standards are still flouted. These are the hospitality, tourism and leisure sector, retail, and the care sector.

Recently there have been cases of abuses in other sectors too, often related to migrant workers in the UK. In construction, for example, Polish workers have ended up working for less than the minimum wage due to two related factors.

Firstly, some employers use piecework rates - pay related to the number of bricks laid, which results in excessive working hours and pay rates below the NMW.

Secondly, some employers provide accommodation for workers and deduct it, illegally, from workers' wages. This also results in workers effectively being paid less than the minimum rate.

This hasn't been ignored by the DTI or HM Revenue & Customs - the government departments responsible for enforcing the NMW. This month two initiatives have emerged from Whitehall. The first is a campaign to improve wage rates in the childcare sector involving a combination of education, targeted enforcement and working with employers.

Secondly, the Government is consulting on how the accommodation offset in the NMW provisions operates in reality. This is a recommendation from the 2006 Low Pay Commission report and a result of increasing evidence of abuse in this area, especially related to migrant workers.

It is, of course, legitimate for employers to provide accommodation for workers who have moved to the job, but current regulations limit this to just under £30 per week. Some employers are reducing wages by £90, which can be illegal and is an abusive exploitation of vulnerable workers. It must stop if we are to attract more people to move here to work.

Kevin Rowan is regional secretary of the Northern TUC