Fair Pay

With National Minimum Wage set to rise this April, here’s what you need to know.

“A double-edged sword”

Lucy Lewin is company director of Little Angels nursery in Rutland. She has 20 staff, from apprentice to nursery manager, and also runs The Profitable Nursery Academy.

She says: “I sit in two opposing positions on NMW. As a mother, I want my 22-year-old daughter to go into the workforce and receive a fair salary. But as an employer, NMW often pushes some team members over the personal tax allowance threshold and puts my tax bill up.

“It really is a double-edged sword and narrows the gap between unqualified and qualified team members. As a result, I feel it is only right to put everyone else’s salaries up at the same time as NMW increases.”

Lucy adds: “Most people don’t open an early years setting to be an accountant or a payroll clerk, but you have to be savvy and make sure you have a handle on NMW. I don’t begrudge my team a penny – they’re worth their weight in gold – but NMW rises mean money I have to find.”

Legal matters

Paying NMW is a legal requirement if you employ people, no matter how small your childcare setting. If you choose to reduce your childcare fees, as an employer it is crucial to get your sums right as employee pay cannot fall under NMW band.

An HMRC spokesperson says: “Almost all workers are legally entitled to be paid at least the NMW. This includes apprentices, part-time workers and temporary staff on shortterm contracts.

“We know that the vast majority of employers agree with this and believe that they are paying their staff the correct amount. However, mistakes can be made, which could prove costly for all concerned.”

The spokesperson adds: “Our aim is always to help employers and workers address any problems and answer their questions.”

Who’s in?

NMW applies to most workers within the childcare sector. School leavers, apprentices and employees must be paid NMW.

While it does not apply to self-employed practitioners such as childminders, if they employ a childminding assistant or another registered childminder, that person must receive NMW if they are not registered as self-employed.

Employed nannies are entitled to NMW, although accommodation costs for residential nannies may be taken into account when working out wages. This depends on whether accommodation is provided for free or at an additional cost to the nanny.

Volunteers are not entitled to NMW, but all part-time workers and temporary staff qualify.

Further resources

NMW calculator: bit.ly/ NMW-calculator

PACEY blog “Paying at least NMW isn’t just the right thing to do, it’s the law”: pacey.org.uk/ national-minimumwage-blog

ACAS NMW entitlement: bit.ly/ACAS-wageentitlement

Dotting the i’s

If you’re an employer, it’s vital to keep your eye on the ball with NMW. The rates usually change every April, so prepare yourself for any rise in wages.

To help with the complexities and to avoid mistakes, some childcare providers hire a payroll company. This can help with record keeping too, as it’s an employer’s responsibility to prove they are paying NMW.

But what if you’re an employee? The HMRC spokesperson advises: “HMRC reviews every complaint made about the minimum wage, so if a worker thinks they are being short-changed, wants to raise concerns, or isn’t sure, they should get in touch.” CP