National Minimum Wage query

[gazza77]

Just seen a local advert offering £10 pH for cleaning jobs, however that is on the basis of the roles being self employed, and as such then having to pay their own tax & NI contributions. Any experts on here could verify if that's actually legal? 

[JonM]

If you're self-employed, you can pay yourself however little you want. £10ph is obviously over the national minimum wage anyway. So, no, nothing illegal. Where it starts to get dodgy is where they offer to handle the NI & Tax for you, and deduct an "admin fee" for doing so.

One of the scams that HMRC finally seems to be doing something about is the one of offering people a job (in a factory, care home, office etc.) where the actual legal employer is a recently formed company, often with directors in the Philippines (who presumably don't know anything about it). You get your pay ok, but that company is claiming various small business grants for creating jobs and the like, doesn't bother to pay national insurance or anything, and then goes bust after a year or two. Some employment agencies have hundreds of these companies on the go.

[Shadow]

When I was made redundant in 2009 I went into my local Jobcentre and looked for Sales jobs because that's what you have to do to be eligible for any form of support. There were loads of 'Self Employed' roles where after you'd paid for your 'training and registration' the employers 'estimated' their contractors would be earning 'well in excess of the minimum wage'.

I complained like a ##### to the Jobcentre staff who sympathised but made the point that home office guidlelines said they had to accept the jobs and if I wanted to see a change i should speak to my MP. 

So I did. I took details of several of the 'opportunities' to my Liberal Democrat MP at the time, who raised it as a question in Home Secretary's questions in the House of Commons, I got a reference as "One of my constituents was asked to pay £XX in training costs as a prerequisite to employment."

She fed it into part of a wider campaign and ultimately got the guidelines changed so any job that required an investment as a prerequisite for employment could not be promoted at Jobcentres.

My point here, apart form showing what a great campaigner for social justice I am, is that unless someone makes the relevant people aware of these scammers and schysters they will continue to get away with it. 

[gazza77]

6 hours ago, JonM said:

If you're self-employed, you can pay yourself however little you want. £10ph is obviously over the national minimum wage anyway. So, no, nothing illegal. Where it starts to get dodgy is where they offer to handle the NI & Tax for you, and deduct an "admin fee" for doing so.

One of the scams that HMRC finally seems to be doing something about is the one of offering people a job (in a factory, care home, office etc.) where the actual legal employer is a recently formed company, often with directors in the Philippines (who presumably don't know anything about it). You get your pay ok, but that company is claiming various small business grants for creating jobs and the like, doesn't bother to pay national insurance or anything, and then goes bust after a year or two. Some employment agencies have hundreds of these companies on the go.

Thanks. 

The way I'm reading the offer is "we pay you £10, you pay tax & NI out of that" , meaning you then pay yourself less than nmw. It may be legal, but it doesn't feel either right or the type of employer I'd want to be associated with. 

[JonM]

32 minutes ago, gazza77 said:

Thanks. 

The way I'm reading the offer is "we pay you £10, you pay tax & NI out of that" , meaning you then pay yourself less than nmw. It may be legal, but it doesn't feel either right or the type of employer I'd want to be associated with. 

My wife works for a charity which pays NMW. If she earns more than £120 per week, she pays national insurance. If she earns over £12 700 (or whatever it is), she pays income tax. As she generally only does a few days per month, she doesn't usually pay either. Don't see how that's much different to the above - other than the extra admin hassle of being self employed.

I'd imagine it's fairly normal for cleaning jobs, because a lot of those will involve doing a couple of hours for one customer, a couple of hours for another and so on. You probably wouldn't want a whole bunch of different employers trying to sort out your tax. I wonder who is expected to pay for materials in this case though. 

FWIW, friend who is a cleaner in Cambridge charges £20ph, and has a long waiting list for new customers. Office cleaners working 7-10, where I used to work were on £13ph - mostly seemed to be students doing it.