Low Pay Commission recommends that the family worker exemption should be removed

Having gathered evidence on the exemption, our conclusion is that it is not fit for purpose. We recommend that the Government should remove the exemption from the NMW regulations, and that live-in workers should be paid the minimum wage as is the case for other workers’

Low Pay Commission, October 2021

After years of litigation and research, ATLEU and partners have made the case for the family worker exemption to be removed. This has led to the important recommendation from the Low Pay Commission today that it is not fit for purpose.

Under regulation 57(3) of the National Minimum Wage Regulations 2015, live-in domestic workers, who are treated as a member of the family, are not entitled in law to receive the national minimum wage, or any salary at all. This is often referred to as the ‘family worker exemption’.

This regulation means that an employer faced with a claim that they have failed to pay their live-in domestic worker a salary, or one in line with the national minimum wage, has a potential defence. When an employer raises this defence, workers who may have been subjected to serious exploitation or abuse are required to demonstrate that they were not treated as a member of the family. This creates a significant barrier to achieving justice, especially for vulnerable individuals who are often already disadvantaged when they attempt to assert their legal rights.

The isolated nature of work in a private household places overseas domestic workers at a particular disadvantage when giving evidence to a tribunal and achieving justice. They are frequently the only witness of fact; they regularly speak little or no English and depend on interpreters, diminishing the force of their evidence; and many are traumatised and vulnerable, impairing their ability to give coherent evidence. By contrast, workers’ employers are generally able to call witness evidence of a number of family members who are usually highly educated, professional people able to communicate effectively with the Court or Tribunal.

In practice, the exemption is almost always raised by the employer as a defence, regardless of the facts. For example, in one case the employer, a member of the Saudi Royal family, asserted that the Claimant, who lived in the basement of an adjacent property was a member of the family. In another, an employer who restricted the Claimant’s movements and starved her to the extent that she collapsed, claimed that she had been treated as a member of the family.

In July 2020, ATLEU successfully challenged the lawfulness of the exemption in the case of Ms K Puthenveetil v (1) Mr Santosh Alexander, (2) Ms Riya George, (3) Secretary of State of Business Energy and Industrial Strategy Case No. 2361118/2013. We argued that it was discriminatory as it resulted in greater numbers of women than men being excluded from an entitlement to the national minimum wage or indeed, any salary at all.

As a result of the judgment in Puthenveetil, the government asked the Low Pay Commission to seek further evidence of the difficulties arising from the r57(3) to make recommendations as to the removal/amendment of the exemption.

The Low Pay Commission has recommended that the exemption be removed in its entirety, stating:

If the government wishes to retain an exemption it would need to introduce a visa route for au pairs and amend 57(3) to avoid a loophole for exploitation. The exemption should clearly state what is meant by an au pair and the scope of their duties to ensure that it cannot be applied to domestic workers, to care workers, or to au pairs who are de facto working as cleaners and nannies without adequate remuneration or genuine cultural exchange. The exemption should also expressly state that it cannot be relied upon by those employed under an overseas domestic worker visa.

We now urge the government to crack down on the perpetrators of human trafficking and close this loophole that is all too often exploited by rogue employers, because unless the recommendation is taken up and given statutory effect, employers can still exploit their workers with impunity.

In the event that an employer attempts to rely on r57(3), then legal advisors should place the Secretary of State for Business Energy and Industrial Strategy on notice of the claim and seek a preliminary hearing in order that the lawfulness of the regulation can be considered from the outset.

Contact advice@atleu.org.uk if you have a case in which the lawfulness of r57(3) is a live issue, as we can assist with the provision of relevant evidence.

We would also like to thank the following individuals and organisations who worked with us to end this injustice: Kalayaan, Kanlungan, Voice of Domestic Workers, Hope for Justice, Professor Rosie Cox , British Au Pair Agencies Association and the Anti Slavery Commissioner, who also submitted evidence to the commission.

Read the full letter from the Low Pay Commission to the government here.