September 1999
When is a live-in nanny not a live-in nanny?
According to the DTI it’s when she has her own room, not her own flat. Nannytax investigate this anomaly
The National Minimum Wage (NMW) was introduced by the Government in April of this year to protect all types of employees from being paid exploitation wages by their employers. In promoting this legislation the Government cast itself as the champion of all employees throughout the UK.
Originally all nannies, as well as au pairs, were included in the draft NMW legislation, and since many nannies work long hours for quite low wages, and the NMW is based upon a minimum hourly rate this was clearly a good thing, However, at the last minute, just before the final version of the legislation was published, not just au pairs but also live-in nannies who live as part of the family household were excluded from the legislation and their employers are not now required to pay them the NMW
The debate about whether au pairs should be included in the legislation was well publicised, It brought to light many people's misconceptions as to what an au pair officially is and does – au pairs are supposed to work only a maximum of 25 hours in any week, and receive pocket money rather than a proper wage, plus the board and lodging which enables them to follow an English language course. The Government was lobbied to remove au pairs from the NMW legislation and since they are not qualified childcarers and are not considered to be employees in the usual sense of
the word a good argument exists for excluding them from the NMW legislation, Au pairs represent cheap part-time childcare to many parents, It is true that very many employers exploit this economy, but at least there is an accepted trade-off between the pocket money and the educational experience that living with a family in another culture represents,
But what has not been widely publicised is that some live-in nannies have also been exempted from the NMW legislation, Live-in nannies, along with other domestic employees, are already excluded from the provisions in the European Working Time Directive which govern maximum hours to be worked, and have been lumped with au pairs, despite the fact that this is their full-time job in which they often work twice as many hours a week as au pairs are permitted to and that they have usually studied and obtained a childcare qualification,
This exclusion does not affect live-in nannies for whom separate accommodation (i.e. a separate flat) is provided, and the main criteria that the Department of Trade & Industry (DTI) suggests be used to distinguish between these nannies and those who actually live in the family household is whether the nanny has a separately metered electricity supply or not.
Maggie Dyer of the London Au Pair and Nanny Agency was shocked to hear the DTI was distinguishing between live-in nannies, “I don't believe it – that's disgraceful!” she said, “In Switzerland most nannies have their own self-contained apartments and many nannies in the country have separate accommodation, But in London and other cities we all live on top of each other and live-in nannies invariably just have a room in the family home – they often don't even have their own bathroom. True, they are usually paid well in London, but that's not the point. The girls who have a room in the family home do the same work as those in their own flat. They are still professionals, doing a professional job.”
The only argument that could reasonably be used to justify excluding some live-in nannies from the NMW is that as part of the family household they would have most of their living costs, including food, heat and light etc paid for by their employer, but whether this justifies removing nannies from the protection that the NMW legislation provides is debatable. Anyway, do nannies in separate accommodation necessarily pay their own heat and light bills, or are these covered by their employers?
“In fact”, says Tricia Pritchard, of nannies’ union PANN, “the whole issue of accommodation has been confused by the introduction of the NMW. We have had members who are simply told that they are living in from now on, or to consider themselves as live-in, even if they aren't. Some don't have a room or a flat – they're just given a sofa. All this is so that parents can exempt their nanny from the NMW. I spoke to one mother this morning who was offering her nanny a room in the attic with a kitchen and bathroom, but who was enquiring how much that would reduce her nanny’s salary. It's adding insult to injury – very often nannies are charged rent on their accommodation and now they lose out on the NMW, too. This is yet another example of the Government's blind spot where nannies are concerned. They seem to think they are the perfect young people to exploit.”
For nannies for whom separate accommodation is provided, employers can offset some of the NMW rates – currently 50p per hour for the first 39 hours per week – to cover the cost of the accommodation benefit provided. Incidentally, accommodation provided for the purposes of your job is not a taxable benefit – which means that neither you nor your employer has to pay tax on it.
Certainly having a room in the house can work to a nanny's advantage. Sally Ann Johnston has been working for the same family in Surrey for seven years. “I don't pay for anything,” she says. “I even go out with my employers at weekends. However, I do think that this legislation is unfair to those of us who don't have our own flats. I am lucky and get a lot from my employers but I have friends who have been working in the same job for years and haven't even had a pay rise. Even though they have contracts, their employers don't stick to them and the nannies find it hard to stand up for themselves.” And the DTI ruling, by dividing live-in nannies into two categories, will do nothing to help girls in these situations.
Of course because the NMW legislation excludes some live-in nannies does not mean that their employers necessarily have to pay them below the NMW wage, and indeed many employers, especially those with more experienced live-in nannies will certainly be paying their nannies above the current NMW rates of £3 per hour (age 18-21) and £3.60 per hour over 22).
In some parts of the country, however, employers are more than happy to try to pay their nannies well below the minimum wage. “We are always being approached by clients who would be delighted to pay their nannies £2 per hour”, says Jane Dennison of The Nanny Bureau.co.uk in Newcastle upon Tyne. “In our experience if you give parents an inch they'll take a mile and I believe that most live-in nannies are already exploited to the hilt – they are overworked and underpaid. Our policy is to tell clients to go elsewhere if they are not prepared to offer the NMW – unless, maybe, they are really offering a fantastic package with exceptional perks, but that very rarely happens.”
The agency has been taking more and more enquiries from clients in the south: “I suspect that's because they are already blacklisted by their local agencies,” says Jane, “Some of them are so rude – they think we're stupid in the north – and they are just after getting childcare on the cheap. This DTI ruling is dreadful and just another complication in an already complicated business. The legislation is so unclear – we get a lot of people ringing us for advice as they simply don't know, or don't understand the rules. We had a girl ringing recently who is 28 and working 60 hours a week for £2.15 an hour. I told her to ring the NMW helpline as there are hefty fines for employers who don't fulfil their obligations, but it's all very unclear and not at all well publicised.”
The main concern of this exclusion of some nannies from the NMW legislation must surely be that those younger, poorly paid, and relatively inexperienced nannies who most need the protection of the NMW legislation are precisely those who have been excluded, without their even having the protection of the maximum 25 hour working week that applies to au pairs.
And short of lobbying for changes to the NMW legislation, the only immediate redress that a live-in nanny who is being paid below the NMW rate has is to try to change jobs and work for a different employer either as a daily nanny or a live-in nanny for whom separate accommodation is provided.