Agencies under pressure to pay minimum wage for placements

Britain’s agencies are being warned this week to stop slipping under-the-counter payments to creative placements or risk prosecution under minimum wage legislation.

Britain’s agencies are being warned this week to stop slipping

under-the-counter payments to creative placements or risk prosecution

under minimum wage legislation.



The new law introduced earlier this month entitles creative placements

to receive at least pounds 3.60 an hour - which is more than many

agencies are paying them.



Now the Institute of Practitioners in Advertising is telling member

shops they must review their arrangements or face the prospect of

investigation by the Inland Revenue or being taken to an industrial

tribunal.



The IPA’s move follows legal advice that agencies are not exempt from

paying the minimum wage.



As a result, it is reaffirming its advice that creative placements

should be on the payroll, have their tax deducted and their national

insurance contributions paid.



The placement system, under which young creatives fresh from art college

work for agencies on a temporary basis - and are sometimes paid a

pittance - in the hope that their talents will lead to a job offer, has

been one of the industry’s enduring controversies.



’Most agencies have not been paying the minimum wage because placements

have not been regarded as ’proper’ staff,’ Mary Budd, the IPA’s

employment affairs consultant, said. ’Some placements are just slipped

pounds 50 at the end of the week.



’Now they have to be properly rewarded and agencies that fail to do so

will be breaking the law.’



However, some within the industry are concerned that the minimum wage

will lead to fewer placement opportunities because small agencies will

have difficulty finding the extra money needed to comply with the law.



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