Employers taking on young people over the summer period could be caught out by anomalies in age discrimination legislation if they pay them more than the national minimum wage, says Wedlake Bell, the commercial law firm. The warning is made in the firm’s first issue of its Hotel and Leisure Law newsletter called “Hospitality News”.
According to Wedlake Bell, employers are allowed to pay workers under 22 less than other staff without having to justify their decision, but only if the younger workers are paid less than the “adult” national minimum wage rate of £5.35.
However if they pay younger staff, such as holiday workers and students, more than the adult minimum wage rate, but still less than older workers, they could be committing unlawful age discrimination. Companies often pay holiday staff less than permanent or full time staff as a recognition of the loyalty and experience full time workers bring.
David Israel, Employment Partner and member of the Hotel and Leisure Group at Wedlake Bell, says: “At this time of year, the numbers of young people coming onto the employment market swell as thousands leave education and want permanent or gap year work or are simply looking for a summer job. So this is an issue that many businesses, but particularly hotels, bars, restaurants, and retailers who tend to be the biggest employers of students and young people, really cannot afford to ignore.”
“Unfortunately, employers may well be discouraged from being generous to their staff because of these quirks in the age discrimination rules. If they fear they could be caught out by paying above the national minimum wage, even if they may be able to subsequently justify their actions, they may decide just to stick to the minimum wage simply to avoid any risk whatsoever.”
According to a recent Oxford University study which was commissioned by the British Retail Consortium, 96% of workers in the hospitality industry and 75% of those working in the retail and wholesale sectors earn the minimum wage.
David Israel adds that the way the rules are drawn up could also make the pay disparity between the ages even greater. For example, employers could fall foul of age discrimination laws if they paid a 17 year old £6 an hour and a 23 year old £7 per hour for doing the same job. However, there would be no risk for the employer if they paid the 17 year old £5 an hour and the 23 year old £7 per hour, because the younger worker is being paid less than the adult minimum wage rate.
Comments David Israel, “This surely goes against everything the government is trying to achieve through the ageism and minimum wage laws. Most employers will prefer the “norisk” option, and thus the government really needs to look again at these anomalous and unnecessarily complicated rules if young people are not to lose out and businesses are not to be put at risk of accidental discrimination.”