Minimum wage undermined by fake self-employment

Self-employed business opportunity? No thanks | John Harris | Comment is free | The Guardian

This article exposes something I have had personal experience of in the past year, which is proper jobs (usually minimum wage jobs) being replaced by “self-employment opportunities”, in which the worker is paid directly and expected to look after his own taxes and National Insurance contributions, and commonly they are paid less than the minimum wage, which is quite legal as he is not actually an employee but a contractor. The Daily Mirror has been running a campaign, “Gizza Proper Job”, which exposes this behvaiour going on in a number of major companies including one that I’ve worked for (not on this basis), Hermes Parcelnet. Their full index of stories on the subject is here and sectors implicated include nursing, car manufacturing, hairdressing, telesales, doorstep energy selling, scaffolding, car delivery … you name it, it’s there.

I haven’t been on any of these “self-employed” sub-minimum-wage jobs, but I had an agency convert itself into such an enterprise and begin pressuring its employees into going on one of two contracts in which pay was administered not by them, but by a third party, and the worker was expected to pay the contractor’s fees. The drivers at the site where I did most of my work either refused to sign or insisted on being backed out after a week when the promised higher pay did not materialise, but they then started using another contractor and told me it was either self-employment, a managed limited company (which paid my wages as a “director” of that company) or no more work. I approached other agencies and they told me that the limited-company approach offered benefits when the worker was in a long-term placement, but not when they were working on an ad-hoc basis. The management companies (Oriel and PML are two of the biggest names in that particular business) charge a fee either every month or every week, and if you only get one day’s work in a week, you may lose most of it to the management fee.

The ostensible reason my agency did this was to circumvent the new agency worker regulations, which were apparently rushed in over the last summer and most companies were unprepared. Their main provision is that long-term agency workers are entitled to pay equal to that of similarly and directly employed workers, and the agency tried telling me that this would mean my wages being adjusted downwards if I had been getting paid more than the directly-employed workers. In fact, the rules state that agency staff must be paid as much as or more than them. Agency staff are often paid more per hour than regular staff because they do not have any security and may be travelling further (I regularly travelled to Maidstone, and frequently to Worthing, for one of my agency driving jobs), and often find their wages reduced if a “temp-to-perm” job actually becomes permanent. In any case, the organisation I was working for (an ambulance service) was only hiring agency staff to do this particular kind of work, so the issue of adjusting my wages would not have arisen.

Owen Jones, in his recent book Chavs, had a section on the casualisation of the work market, with a move to hiring agency staff to do regular jobs so that they can be sacked at a moment’s notice if they were no longer needed with no redundancy pay, but this move away from proper employment contracts towards “self-employed” work at below the minimum wage seems to have only just been picked up on - the Mirror reported (on their “Penman and Sommerlad investigate” blog, not in print) last June about the “trade platers” (people who deliver cars on “trade plates” or temporary licence plates) who earn well below the minimum wage and frequently have to hitch-hike from car auction sites which are away from regular public transport (like the one in the middle of nowhere off the A30 west of Camberley). This is something I became aware of in 2007, so it’s not new.

I will certainly be giving my story to the Mirror’s investigation (and naming the agency, which I haven’t done here yet). Luckily, I got out before I could get scammed, but it seems others are too desperate for work and will take anything, however poorly it pays (I’m still living with my parents). It is not the only way employers are currently able to get around the minimum wage (which is only £6.08 per hour currently) — among the others is not paying someone for the time which is taken travelling from job to job for the same employer, as touched on in this article attached to the Panorama on this subject from last October — but it also exposes the worker to the liabilities of tax returns and potential (large) fines if they make a mistake. Those who work in the media may be able to afford that, and they are better educated and have access to networks of other freelancers. Agency drivers don’t. Fake self-employment must be exposed and must be stopped.

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