NMW Accommodation Offset from 1st Oct 2008?

Alison Hull · PayPerShop Member Joined: 28 Feb 2008 Posts: 35

Hi all,
Does anyone know if the new Accomodation Offset for NMW purposes (currently �30.10pw) has been published yet? I can't find it anywhere. Also, do you know if there is any way of taking account of much greater expenses incurred for live-in staff? For example, they may be on less than NMW, but get accomodation and full meals.
Grateful for any thoughts.
Alison

Ian Whyteside · Posted: Mon Mar 10, 2008 10:43 am Post subject: NMW and the accommodation offset

Hi Alison,

Like you I have looked at the figures and as far as I can see they have not formally published the offset.

My assumption is that since the rates have increased by 3.8% then it is likely that the offset will increase by the same amount to �31.20 to �31.25 or thereabouts.

I'll bet Ian knows the figure though, or where to get it!

Ian Whyteside

Ian Congreave

The new rate was announced last week along with the increases to the national minimum wage rates from October 2008. All of the details will be in next week's newsletter. The accommodation offset from October 2008 will be �4.46 per day, equivalent to �31.22 for a 7-day period.

The NMW regulations allow a variety of deductions or payments to be subtracted from the NMW but the provisions are very complicated to understand. The provision of living accommodation, up to the maximum offset amount, is permitted but no other specific benefits. Two provisions, however, may be considered.

(1) A payment made for the purchase of goods or services from the employer may not be subtracted unless it is made in order to comply with a requirement in the worker�s contract in connection with his employment - I doubt however that it could be shown that a contractual requirement to buy meals from the employer could be shown to be "in connection with the employment".

(2) A deduction made by the employer for his own use and benefit, i.e. not attributable to any amount paid or payable by the employer to any other person on behalf of the worker (except for living accommodation). An example of this involved workers in a holiday camp who were charged for heating and lighting - this could not be offset because the payment went towards towards the employer's electricity bills. Could that provision be used to cover meals? On the basis that the employer has bought the ingredients and the deduction from the employee would go towards those costs, I doubt whether that would be permitted.

So, it does not seem possible to provide meals and offset the costs against the NMW. The general principle here is that an employer is not allowed to create a situation where employees are effectively forced to buy services from the employer - a practice prohibited by the original "truck" Acts. Accommodation is an exception but the amount that may be "charged" is restricted. I would have thought that an employer's best option is to charge for meals as and when the workers obtain them, as most employers do, and not to be seen as trying to take advantage of workers who live on site.
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Alison Hull · PayPerShop Member Joined: 28 Feb 2008 Posts: 35

Thanks Ian, that's very, very helpful. I love this website!