Do you employ students?

The Department for Business, Innovation and Skills (BIS) has proposed a change to the way the national minimum wage is calculated for students who are employed by higher and further education institutions when those students are studying with the institution and are also provided with accommodation by them.

The national minimum wage rules allow employers to take into account any accommodation which is provided to workers as a benefit in kind towards the national minimum wage up to a set limit.

The Government has recognised current concerns that if accommodation is provided to students and they are also employed part-time, this offset rule can result in unintended financial advantages to the student because the institution may not be able to charge the student in full for their accommodation.

On 18 January 2011, BIS launched a consultation on the proposal to remove the offset rule so that further and higher education institutions are excluded from it. They are looking for comments by 12 April 2011 and a response is expected in May. It is thought that any changes to the current rules will take effect in October 2011.

For advice or more information on this, please contact Emily Brown at emily.brown@birkettlong.co.uk.