Perhaps it will come as a surprise to some employers, but the new age discrimination laws – due to come into force in October 2006 – are not just about protecting older people. Unlike age discrimination legislation in the US, the UK Regulations will protect younger workers from ageist discrimination too.
It’s the hard knock of life …
One obvious way in which younger workers are discriminated against is in relation to the national minimum wage (NMW). These laws were introduced by the Government back in 1999 and set age rates for younger employees that distinguish between 16-17 year olds (currently £3 per hour), 18-21 year olds (currently £4.25 per hour, rising to £4.45 from October 2006) and 22 year olds and over (currently £5.05 per hour, rising to £5.35 from October 2006).
The Government has been keen to keep its NMW laws. As a result, before it would sign up to the EU directive which obliges it to introduce age discrimination laws, it extracted an assurance that it could keep different NMW rates for younger workers – despite the fact these are age discriminatory and would be unlawful in most other European countries.
The Government’s justification for keeping the national minimum wage rates is twofold. Firstly, they say it is justified because, in its view, many employers would be unwilling to pay younger employees the same (higher) minimum wage rate that employees aged 22 or over are getting – so the age bands make it easier for younger workers to find employment and encourage employers to take on younger employees.
Secondly, the Government believes that the age bands encourage young people to stay in full-time education (presumably because the bands for younger workers are so low it does not make working very appealing!).
Arguably, these reasons are somewhat contradictory and there has been some pressure on the Government to get rid of the NMW rates for younger workers. However, it is clear they are going to stay and, as a result, the draft Employment Equality (Age) Regulations contain complex rules relating to the interaction between the NMW provisions and age discrimination.
Minimum W-ageism
Essentially, employers can pay someone less than a comparable person in a higher NMW age group, provided the younger person is paid below the adult-rate (i.e. the amount paid to workers aged 22 or over).
So, when the Regulations come into force, it would not be unlawful for an employer, in line with the NMW bands, to pay a 25 year old £5.35 per hour and a 21 year old £4.45 per hour for doing the same work. If the 21 year old was paid £5.00, this would also be lawful as this is still below the adult-rate of £5.35, which will be applicable in October 2006.
However, it will be unlawful discrimination to differentiate between individuals within the same NMW band, even if they are being paid below the adult-rate.
So, it may be discriminatory for an employer to pay a 21 year old, say, £5.00 per hour and an 18 year old £4.45 per hour. The employer in this situation would have to justify this difference in treatment. If the difference is based simply on age and for no other reason, it is unlikely to be justified.
The important thing to note is that if employees under the age of 22 are being paid more than the adult-rate band, then the age discrimination laws will always kick in. So, it would be age discriminatory for an employer to pay a 21 year old £8.00 per hour and a 25 year old £12.00 per hour (subject to the employer providing a valid justification for this treatment). This is because £8.00 is above the relevant adult-rate of £5.35.
This all seems reasonably straightforward. However, the Regulations as presently drafted could give rise to a strange anomaly.
In the example above, the employer could pay the 25 year old £12.00 per hour yet pay the 21 year old £4.45 per hour without falling foul of the Regulations, as the 21 year old is being paid be less than the adult NMW rate then applicable. But, as stated above, to pay them £8 per hour would apparently be unlawful age discrimination!
Arguably this anomaly could lead to the exploitation of younger workers and has been pointed out to the Government during the consultation process. The final version of the Regulations is due to be published next Spring.
Emma Perera is an Associate at the employment & incentives department of Lewis Silkin.
