Accommodation offered to employees – Do you need to offer a financial payment as an alternative?

While it is understood that the bill has been introduced to tackle the potential exploitation of migrant workers, it will apply equally to all employers and workers. It is therefore likely to affect employers in many sectors who provide employee accommodation. The additional payment specified shall not be taken into consideration in assessing whether the basic pay is at or above the national minimum wage.

However, the bill states that the requirement to offer a financial alternative to residential accommodation will not apply if the accommodation is deemed to be ‘a necessary requirement of the employment’.

We are aware that a number of our clients offer their employees residential accommodation and that many of these require their employees to live in that accommodation either because they consider that such residence is essential for, or for the better performance of, their duties.

Accommodation provided to low-paid workers (including employees) may affect the calculation of the worker’s pay for national minimum wage purposes. Accommodation may be given a value, known as the “accommodation allowance” or “accommodation off-set”, which is set under regulation 36 of the National Minimum Wage Regulations 1999.

There is not currently a date for the second reading of the bill; and as the next election is in May 2015 it will not become law if it has not completed its passage through Parliament at that stage.

We would recommend that clients who offer accommodation as part of an employment package take this opportunity of reviewing the basis and terms upon which they are doing so and be clear as to whether the occupation of  accommodation is a necessary requirement of the role.

For further information on the impact of existing, and this possible, legislation on your organisation, please contact Stephen Dalling on 0121 212 7429 or [email protected].

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