Living wages are paid

What you must do - law 7

Accommodation - All workers to whom you provide accommodation

General Employment Law

  • Accommodation is the only benefit ‘in kind’ which can count towards a workers’ minimum wage.
  • The accommodation offset determines the maximum monetary equivalent of this benefit.
  • The accommodation offset applies wherever an employer provides accommodation to a worker.
  • From 1 October 2008, where an employer provides accommodation, up to £4.46 per day (£31.22 per week)) can count towards a worker’s pay.
  • If a worker is only paid the minimum wage, they cannot be charged/deducted more than £31.22 per week for accommodation.
  • If a worker is paid more than the minimum wage, the accommodation charges must not take them below what they would have been paid if they were on minimum wage. For more information on how to calculate the accommodation offset.
  • The minimum pay permissible per week, is therefore:
(Hours worked x minimum wage) – accommodation offset

The court of appeal has ruled that accommodation charges should INCLUDE gas, electricity, laundry, provision of furniture etc. These are considered to be ‘charges that workers are obliged to pay as a precondition of being provided with accommodation’ and should therefore be included in the calculation of rent, and therefore the accommodation offset.

This offset applies irrespective of whether:

  • The offset is a part of the terms and conditions of employment.
  • The agreement is separate from terms and conditions of employment.
  • Agreement is written or verbal.
  • The accommodation charge is deducted through the wages or in a separate transaction by employee.
  • Any increase in accommodation charge must be offset by an increase in the wage of the worker.
    If accommodation is provided by a genuine third party, then these rules do not apply

Agricultural Wages Order

  • If a worker lives in a whole house or self-contained accommodation that they are required to live in by their contract of employment so they can better perform their job, they can only be charged a maximum of £1.50 per week.
  • In Scotland - £1.00 per week maximum.
  • In Northern Ireland - £1.50 per week maximum.
  • The Home Office does NOT permit employers to make deductions from pay from SAWS workers on behalf of any third party landlords.
  • For “other accommodation” (e.g. caravans or other means of housing workers) the Accommodation Offset applies.
  • Agricultural workers on minimum wage must work over 15 hours in a week before an employer may charge/deduct for accommodation.

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