CAS responded to the Low Pay Commission's consultation on what future rates of the National Minimum Wage (NMW) should be set at. Based on bureau evidence showing that workers earning the National Minimum Wage are increasingly struggling to afford essentials, CAS recommends the purpose of the NMW should increasingly focus on tackling low pay and in-work poverty, together with a proactive approach to targeting employers who do not pay their staff the National Minimum Wage.
Summary of Recommendations
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The National Minimum Wage should have a clearer role in tackling low pay and in-work poverty.
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A transparent process for setting the levels of the National Minimum Wage linked to this aim should be developed.
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The National Minimum Wage should be set strategically with future rises over the next three to five years set out, rather than being set a year at a time
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The National Minimum Wage should always rise at least in line with the Consumer Prices Index
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As part of the clearer focus on tackling low pay and in-work poverty through the National Minimum Wage, the Low Pay Commission should study the methods used to calculate the Living Wage to determine whether a similar formula can be developed for NMW uprating.
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The youth rates of the National Minimum Wage should be reviewed to consider their relative value, their ability to tackle in-work poverty amongst young people, and to take into account the limited in-work support available from tax credits and benefits for this age group
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More should be done to ensure that workers are not inappropriately being paid the Apprentice Rate, whether for longer than is allowed, or when a worker does not meet the criteria for being paid it.
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Clear information needs to be provided to employers paying the Apprentice Rate to ensure it is used appropriately, with greater enforcement against those who pay it incorrectly.
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The UK Government should undertake an awareness-raising campaign to ensure workers know that they are entitled to a National Minimum Wage and how to claim it.
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Recent enforcement initiatives, such as ‘naming and shaming’ employers who pay less than the National Minimum Wage, should be continued
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Financial penalties for employers who are found to have underpaid multiple staff should be increased, as proposed in the Small Business, Enterprise and Employment Bill
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A proactive approach to targeting employers who do not pay their staff the National Minimum Wage should be taken
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In the longer term, a ‘Fair Employment Commission’ should be created with the legal powers and resources both to secure individual vulnerable workers their rights in all areas of employment (including pay), and to root out rogue employers.
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A strategic approach should be taken across Government to ensure that rises in the National Minimum Wage and changes to the tax and benefit systems are complementary, with the aim of ensuring that workers are better off and do not face in-work poverty.