Schools risk ‘inadvertently’ breaking minimum wage law

Schools risk “inadvertently” breaking minimum wage law if they follow national pay scales for unqualified teachers, legal experts have warned, with ministers leaving leaders to navigate the confusion on their own.

Multiple recent increases mean the national living wage (NLW) is now £12.21 an hour for those aged over 21.

Someone working 37.5 hours a week can expect to earn £23,800 a year, while someone working 40 hours could earn almost £25,400.

However, despite the proposed 4 per cent pay rise for teachers next year, the first point on the unqualified pay range outside London is now below these thresholds at £22,601.

Teachers are technically only “directed” to work 1,265 hours a year, but in reality work much longer. According to the Department for Education, full-time teachers report an average working week of 51.2 hours.

‘Compliance risk’

Hannah Bingham, a senior HR consultant at law firm Browne Jacobson, said the pay scale issue “could cause a compliance risk” if unqualified teachers were expected or directed to work unpaid hours “beyond those for which they are salaried”.

“Even if the contract says 32.5 or 37.5 hours, if in practice the role demands longer hours, for example extracurricular clubs, marking, planning, the effective hourly rate might breach the national living wage.”

The draft pay scales, published in the report of the School Teachers’ Review Body (STRB), will come into effect from September once the government has consulted on its pay decision.

The report said that employers “should ensure that implementation of the pay award complies with the national living wage policy.

“We also expect that the department will want to satisfy itself that employers are compliant.”

However, when approached by Schools Week, the DfE said the matter was one for employers.

‘Not acceptable’ to leave up to schools

Louise Hatswell, a pay specialist at the Association of School and College Leaders, said it was “not acceptable for the government to distance itself and claim this is solely an issue for employers.

“After all, it is the government that sets the statutory pay levels, and at the very least, it should guarantee that they are lawful and deliverable.”

National data shows that in 2023-24, 3,714 teachers, or 0.7 per cent of those nationally, earned less than £25,000 a year. But rates vary by region.

In the north east, north west and inner London, just 0.4 per cent of teachers earned less than £25,000. In the east of England the figure was 1.2 per cent.

Paul Whiteman, the general secretary of the school leaders’ union NAHT, said: “This could potentially put some schools in a difficult position.

“It will be important that trusts and local authorities work closely with individual schools to help them understand the implications and any actions they need to take.”

Schools could also face a similar issue with support staff pay.

Even after the proposed 3.2 per cent pay rise this financial year, the lowest pay point will be around £24,410.

However, the process for setting support staff pay has not concluded, so the full pay scales are not known.

‘Reputational risk’

Bingham said schools and trusts “may face reputational risk or compliance audits if this issue is not addressed proactively”.

“We share in the concern that schools using the lowest pay points on the unqualified range may inadvertently breach NLW law, especially where hours worked in practice are longer than contractually stated.”

She urged schools to carry out a pay risk audit, update their pay policies with pay floors that complied with the minimum wage and arrange training for HR and payroll teams.

It follows concerns that teacher pay rises overall are not keeping up with wage rises in the wider economy. The national living wage rose by 6.7 per cent in April, whereas teachers’ pay will rise by 4 per cent in September.

The STRB estimated teachers’ earnings in 2023-24 were 18.2 per cent below their level in 2010-11 in real terms, compared with 2.5 per cent across the whole economy.

Stephen Morales, the chief executive of the Institute of School Business Leadership, said: “Whilst there is technically a vulnerability of breach with the new pay settlement it feels like a temporary gap in the arrangements.

“We would always encourage our members to do the right thing and be diligent enough to close any loopholes.

“That said, it is important that we make schools and trusts aware of the short-term risks of falling below the NLW and inadvertently underpaying important support staff colleagues.”