IDR | 01 Oct 2017

Non-Standard Contracts and the National Living Wage: A Report for the Low Pay Commission

This report has been written by Sian Moore, Bethania Antunes, Geoff White: Work & Employment Research Unit, University of Greenwich Stephanie Tailby: University of the West of England Kirsty Newsome: University of Sheffield

This research explores the relationship between contractual arrangements and the payment of the National Living Wage (NLW). Its focus is non-standard employment arrangements, specifically: zero hours contracts (ZHCs); Minimum Hours contracts (MHCs); agency work (effectively zero hours in this research); and dependent self-employment. In this report the term ‘dependent self-employed’ (DS-E) is used to refer to workers who are to all intents and purposes employees, but who are defined as self-employed, for example to achieve a more favourable tax and national insurance regime: so-called ‘bogus self-employed’ (BS-E). 

Overall, these contractual forms may mean that workers receive variable pay from week to week and that once hours worked and related costs are taken into account, they may be paid below the NLW, and/or dependent upon in-work benefits to supplement pay. Using qualitative data collection the research contributes a set of worker case studies - 36 in total - drawn from six low paying industry sectors where the types of contracts under investigation are known to be in use. The approach allows detailed scrutiny of hours and their relationship with earnings and consideration of whether the NLW is achieved, taking into account fluctuations and paid and unpaid components of working time.