UK ad agencies 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.

- 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 £3.60 an hour--which is more than many agencies are currently paying them.

Now the Institute of Practitioners in Advertising is telling member shops that 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 aspiring young creatives fresh from art college work for agencies on a temporary basis -- and are sometimes paid a pittance -- in the hope 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 50 quid 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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