The National Minimum Wage Act gives most workers the right to be paid at least National Minimum Wage by their Employer.
However, Regulations made under the Act state that domestic workers and au pairs are exempt from the requirement to pay at least the National Minimum Wage if they:-
- live in the family home; and
- make no payment towards accommodation or meals; and
- whilst they are not family members they are treated as such particularly with regards to the provision of accommodation and meals and the sharing of tasks and leisure activities.
It will generally be easy to say that the worker complies with the first two requirements, however the third is not so clear and easy to establish. Things that need to be considered are what sort of accommodation is the worker given, how far does the worker need to share tasks with their Employer, what tasks would need to be shared and what would constitute inclusion in leisure activities?
Two recent Court of Appeal cases (Nambalat v Taher and anor; and Udin v Chamsi-Pasha and ors) have considered the exemption under the Regulations and in particular in these cases the key issue was were the Claimants treated as members of the family in respect of the third requirement in the exemption.
LJ Pill stated that how accommodation is allocated to the worker is likely to throw light on the issue but is only one of the relevant factors and it is generally not required to be of a particular standard.
The Court considered how much sharing of tasks is required for the exemption to apply. They made it clear that whilst the work done in the household by the worker and the family needs to be shared it does not have to be broadly equivalent as the worker is receiving free accommodation and meals and therefore as a result may be expected to perform more household duties. The Court said what matters is whether the work is done in a context in which the worker is treated as a member of the family and not as a domestic servant and when making this assessment the extent of the work done by the worker under their contract of employment will need to be considered.
The way in which household tasks are shared is, as the regulation recognises, an important indicator of whether the worker is treated as a member of the family and if for example the tasks are particularly onerous then this would indicate that they are not being treated as a member of the family.
The Court also emphasised that it will be for the Tribunal to decide if the exemption applies based on the individual facts of a case, however for the exemption to apply the worker also needs to be involved to some extent in the family’s leisure activities and general life that they would not normally have to do as part of their work. However they do not have to be treated the same as another family working. In both the cases the Court of Appeal decided that the exemption did apply and the workers were not entitled to National Minimum Wage.
Lisa May, Head of Employment at Stanley De Leon Solicitors commented that this exemption is meant to be beneficial to the Employer and the worker and in the majority of cases will do. However, particularly in light of these recent cases, Tribunals will need to be careful that the Regulations are not abused and people do not try and use them as a method of obtaining cheap labour.
If you are considering a worker and you think the exemption may apply in your circumstances we would advise that you take legal advice before you decide not to pay them National Minimum Wage, to avoid any potential claims against you,