New wage laws for homeworkers

Small businesses have been urged to review their pay structures after the government unveiled new minimum wage requirements for homeworkers.

The Department of Trade and Industry (DTI) announced that from October employers will have to pay homeworkers the minimum wages for all hours worked.

At present, many businesses pay homeworkers a set rate of four fifths of the time it takes an average worker to complete a set piece of work.

This system, based on output rather than hours, has been criticised by trade unions for allowing unscrupulous employers to underpay an estimated 70,000 homeworkers.

The DTI said this practice will be abolished, with firms required to pay the minimum wage for each hour worked, or the minimum wage for the number of hours it takes an average employee to complete an agreed block of work.

Ministers said that the move will ensure that all employees, not just the fastest, will get the minimum wage.

In addition, the DTI said that employees must be given clearer information about the rate they are expected to work at and their hourly wage.

Gerry Sutcliffe, the employment relations minister, said that many homeworkers have suffered from low wages and the proposals will mean that around 170,000 homeworkers will see their wages increase by thousands of pounds.

“The National Minimum Wage is almost five years old and this is the latest step we are taking to ensure everyone is paid fairly.

“This change to the law will be especially important to ethnic minority and women workers, who make up a large proportion of people who work at home,” he said.

Linda Devereux, of the National Group on Homeworking, welcomed the announcement.

“We know compliance is a problem in this sector but these amendments should help ensure that homeworkers are finally able to receive the full level of the National Minimum Wage,” she said.

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