RMT Low Pay Comission evidence
1 - Please provide information about yourself or your organisation. If possible, include details about your location, the type of job or business (occupation and/or sector) you are involved in, your workforce if you are an employer (including number of minimum wage workers), and anything else you think is relevant.
This joint response to the Low Pay Commission consultation in 2023 is presented by two organisations: Independent Workers’ Union of Great Britain (IWGB) Nannies and Au Pair Branch and Nanny Solidarity Network.
The Nanny Solidarity Network is a grassroots organisation based in London, led by workers and migrants. We were formed in direct response to the significant challenges faced by nannies and au pairs in the UK during the initial COVID lockdown. Our core objective is to provide comprehensive support, valuable resources, a sense of community, and a platform for collective action to nannies and au pairs.
The Nanny Solidarity Network is committed to fostering a culture of mutual aid among nannies and au pairs, while simultaneously building collective worker power to drive meaningful and radical change within the industry. As a result of this commitment, we have established the first union branch specifically for nannies and au pairs in the UK in 2021, in collaboration with IWGB. The union branch serves the essential purpose of representing and advocating for the rights and interests of nannies and au pairs.
Through our union branch, we engage in negotiations for fair employment contracts, advocate for improved benefits and protections, address workplace grievances, and actively participate in collective bargaining with employers and relevant institutions. Our aim is to empower nannies and au pairs, ensure their voices are heard, and work towards creating a more equitable and fair working environment within the industry.
This consultation response serves as a comprehensive follow-up document to our meeting with the Low Pay Commission the 10th of May, addressing the challenges encountered by in-home childcare workers in the gig economy. We are pleased to provide additional insights, information, and testimonies based on our conversation, with the objective of shedding light on the specific difficulties experienced within this sector.
Through this response, we aim to foster a deeper understanding of the unique circumstances faced by in-home childcare workers in the gig economy. Furthermore, we seek to highlight the adverse effects of deregulation within the gig economy, particularly on workers, and emphasise the importance of implementing minimum wage policy on the childcare platforms.
Background
In-home childcare and domestic work
In recent years, the gig economy has been a topic of extensive discussion. However, this conversation has predominantly focused on male-dominated sectors, overlooking a crucial group: paid domestic workers (Mateescu and Ticona 2020). Throughout history, these workers, including house cleaners and home care providers, have been consistently disregarded by labour laws and regulations. Despite their substantial contribution to the
economy, their experiences have been marginalised and excluded from broader discussions surrounding the gig economy. (Kaine et al., 2020; Ticona & Mateescu, 2018a; Ticona et al., 2018).
In the United Kingdom, the exclusion of legal rights for domestic workers is particularly prevalent. These workers are not protected by weekly working hour restrictions (Working Time Regulations – SI 1998/1833, Reg 19) and the UK's Health and Safety at Work Act 1974, s.51 excludes those employed as domestic servants in private households, exposing them to various health and safety risks. Furthermore, up until 2015, employers were not obliged to contribute to pensions for caregivers and cleaners working in private homes, and it was only in 2021 that the Low Pay Commission recommended the removal of minimum wage exemptions for live-in domestic workers.
Moreover, as domestic work is often perceived as a labour of love and predominantly carried out by women within the private sphere of the household, it presents inherent challenges in accessing and enforcing basic rights (e.g. Gutiérrez Rodríguez 2012; Mantouvalou 2012; Albin 2012; Mullally and Murphy 2014). While certain segments of the nanny workforce have been able to access more formalised employment through agencies that provide contractual arrangements, these opportunities have primarily been limited to white, documented workers within a disproportionately migrant workforce (Busch, 2013).
Despite the challenging working conditions in the UK, there has been a notable rise in the use of in-home childcare workers, including nannies, babysitters and au pairs. This shift can be attributed to various factors, including the rising costs of nursery fees and the need for more flexible childcare arrangements with more people working long and regular hours on zero-hours contracts.
Childcare platforms
Recently, digital childcare platforms have experienced significant growth due to this increased demand and have further contributed to the precarisation of these workers. Studies indicate that the UK population more often uses online services for acquiring household services than other categories1. Furthermore, there is a projected rapid growth in the household services sector within the gig economy in the European Union2.
Contrary to expectations, this platformisation has not led to improved protection and recognition for domestic workers. Instead, it has increased job insecurity and intensified algorithmic control and surveillance over workers. While platforms have introduced certain formalisation measures like digital payment systems and insurance, these prioritise client needs over worker well-being.
In the gig economy, control over workers is exerted through rating systems, replacing direct employer domination (Prassl 2018, 54). Workers are closely monitored and expected to be available at short notice, lacking the job security and collective voice found in unionised workplaces. (Huws 2019, 19-20). Ratings, influenced by factors like ethnicity, gender, and age (Hunt and Machingura 2016, 27, Prassl 2018, 62) significantly impact job availability and quality. Limited recourse to challenge platform decisions and exclusion from unfair dismissal remedies compound the problem. (Mateescu and Ticona 2020)
In the UK, the three major childcare platforms are childcare.co.uk, Bubble, and KoruKids. Among them, childcare.co.uk holds the top position, boasting 2.5 million users on it’s website and app since its establishment in 2009. Bubble and KoruKids were both launched a few years later, in 2016.While it is difficult to know the precise user numbers for each platform, download figures on the Google Play store indicate that Bubble is the second largest platform out of the three, with 50,000+ downloads, compared to KoruKids' 1,000+ downloads.(The Insecure Economy, 2022, p. 47)
These childcare platforms share similarities with labour platforms in other work sectors in terms of expanding the scale and immediacy of worker sourcing. They generally operate using worker’s geolocation, rating and reviews to create matches with potential employers. Workers then undergo vetting processes and are managed remotely through algorithmic systems. However, there are differences between these platforms and other labour platforms in how they operate and the consequences of the rules for the workers.
Childcare.com3 for example, provides a platform for exchanging information and connecting individuals interested in various childcare services such as babysitters, childminders, nannies, nurseries, household help, maternity nurses, private tutors, schools and childcare jobs. Users, including parents and childcare providers, can set up profiles providing details about themselves. Caregiver profiles showcase their experience, qualifications, and availability, enabling users to discuss specific requirements, negotiate terms, and make arrangements for childcare services.
Their business model relies on two primary sources of revenue. Firstly, they offer caregivers and parents various membership tiers or subscription plans, granting them access to additional features and benefits, such as enhanced visibility in search results, priority messaging, and supplementary resources. Users are required to pay a fee to subscribe to these membership plans, which contribute to the platform's income. Secondly, when a successful match or transaction takes place between a caregiver and a parent on Childcare.com, the platform may charge a transaction fee. This fee is calculated as a percentage of the payment made by the parent to the caregiver for the childcare services provided.
Koru Kids4 is focused on connecting long-term families with nannies, and the entire work process is facilitated through their platform. Nannies subscribe and go through interviews, where they need to present their documents DBS (Disclosure and Barring Service) certificate, right to work, references; they are then classified based on their experience to determine their hourly rate, ranging from £10 to £13.50 (including holiday pay)5. Also, depending on the hours worked, there may be a reduction in tax and national insurance contributions6.
When creating an account on the platform, parents provide information about their childcare needs, such as schedule, location, and specific requirements. Based on this information, the platform helps find the best match between parents and nannies. After finding the ideal career there is a fee of £89 for contract drafting and, if necessary, assistance with HMRC and tax deductions, for the parents the hourly rate starts at £15 in London or £14 in other cities7.
The platform facilitates the whole relationship between parents and nannies but does not take on the role of an employer; because of this, the contracts that are drafted do not mention Koru Kids’ name. The standard contract does not guarantee hours of work during bank holidays or children's breaks8, and it also does not cover sick leave. However, these and other rules can be mutually agreed upon between parents and nannies.
Bubble focuses primarily on providing on-demand childcare services, with an additional permanent nanny agency service. Their main focus is on shorter-term and ad-hoc babysitting arrangements. Parents using Bubble have the convenience of booking a babysitter with as little as 30 minutes' notice, and a significant portion of bookings are made within 48 hours. (The Insecure Economy, 2022, p. 48). Monthly subscriptions to Bubble are increasingly provided by employers of white-collar parents and are part of an increasing number of firms’ HR packages. This strategy has further popularised Bubble in the UK.
As a parent using Bubble, you can create a profile with basic information, including a valid phone number, address, and credit/debit card. The platform offers various options for childcare services, including single babysitting sessions, regular assistance, permanent nannies, 'Helpers' for non-child care tasks, and night-nannies. For regular help, parents can book a sitter for up to 12 weeks at a time, with the option to rebook for another 12 weeks. This allows parents to essentially hire a nanny at the rate and informality of a babysitter, which differs from traditional nanny agencies which often involve employment contracts for placements lasting 12 weeks or less. (The Insecure Economy,2022, p. 47).
As a sitter on Bubble, you are required to fill out a form providing information such as your name, age, address, phone number, bank account details and experience. The platform also conducts background checks, giving the option to submit your DBS certificate, first-aid course certification and references. You can specify your availability and set your own rate, although the app suggests a rate of £9.50 per hour.
Once a booking is accepted, Bubble's app accurately tracks the caregivers' working time down to the minute. Their revenue model is based on taking a percentage of payments via a transaction fee. Currently, the fee is 10% for the first booking and decreases to 5% after six bookings with the same family.
The platform does not formalise an employment relationship between sitters and parents. Sitters on the app do not sign employment contracts but agree to the platform's Terms of Use. By classifying workers as "users" instead of employees, Bubble avoids assuming responsibility for the working conditions. The Terms9 of Use explicitly states that Bubble does not provide employment services or seek employment for sitters. Unlike traditional nanny agencies, Bubble does not create contracts or act as a mediator between parties.
1 https://www.pwc.com/hu/en/kiadvanyok/assets/pdf/sharing-economy-en.pdf
2 https://uhra.herts.ac.uk/bitstream/handle/2299/19922/Huws_U._Spencer_N.H._Syrdal_D.S._Holt_K. _2017_.pdf?sequence=2
3 https://www.childcare.co.uk/
4 https://www.korukids.co.uk/
5 https://intercom.help/korukids/en/articles/2547052-how-much-will-i-get-paid
6 https://intercom.help/korukids/en/articles/2747398-why-have-i-been-taxed
7 https://intercom.help/korukids/en/articles/2561852-how-much-does-it-cost
8 https://intercom.help/korukids/en/articles/3608141-how-does-the-9-hour-weekly-minimum-work
9 https://joinbubble.com/terms-of-use
Questions 6 - 13: The experience of low paid workers
The use of online platforms has become a popular tool for childcare workers to find jobs, especially among members of the IWGB (Independent Workers' Union of Great Britain) and The Nanny Solidarity Network. Although these platforms have facilitated job opportunities and even formalised parts of the process, the lack of regulation of these platforms has put our members at risk and threatened recently acquired rights.
One platform that raises specific concerns is Bubble. As the platform gains popularity and becomes the primary method for childcare workers to find jobs and earn income, its informal and unregulated nature has had detrimental effects on the workers and the industry as a whole.
As is often the case with platform work, the design of Bubble exacerbates the burdens on workers while giving the client/consumer more power. (The Insecure Economy, 2022, p.50) It intensifies competition amongst workers and implements policies that guarantee quality work for lower prices, all while absolving itself of any responsibility or support for its workers.
1. Poverty Pay
The intense competition generated by the app often leaves workers on childcare platforms with a sense of disposability as they vie for a limited number of job opportunities. This contrasts with the traditional "word-of-mouth" system, families had a smaller pool of caregivers to choose from. This incentivised better treatment of workers in order to avoid the risk of losing a trusted local nanny. Although workers are able to set their own rates, the app suggests a rate of £9.50 which falls below the minimum wage. Our members have described how they struggle to find jobs on these platforms when they list their regular off-platform fees, with some charging as low as £7.00/hour.
"I wasn't able to find work for a fair rate, and even when I lowered my rate, I wasn't able to get enough work. There's no guarantee of work even when a family books you for 12 weeks; they can cancel on you at any time. This year has been a struggle to pay my rent and buy food." Sara
2. Long and Irregular Hours
This platform also fragments childcare work, requiring workers to serve multiple families in order to achieve a sustainable weekly income.
Instead of regularly rotating among a small group of families in a local area, childcare workers often find themselves transitioning between families in different areas, with their earnings consisting of a significantly larger number of sporadic jobs than before. Members describe how significant parts of their day are spent travelling between jobs. This time is unpaid and bus or train fees further reduce workers’ pay.
"That's no guarantee of working hours, as parents can cancel you anytime, change the schedule, and terminate the sit as they wish. You have to be available at all times and work with multiple families to generate a good income. Consequently, you end up spending a significant amount of money and time on public transport. I have to work three jobs simultaneously to earn a decent income." Thaina
3. Loss of pay from last minute cancellations
The lack of regular, secure work on Bubble is exacerbated by the fact that parents have the authority to change, terminate, or cancel a sitting as they please without consequence. Many workers in our network have complained about being paid for fewer hours than actually worked, having their agreed-upon hours reduced or experiencing last-minute cancellations of their sits.
Although a 25%11 fee has recently been introduced for cancellations with less than 6 hours’ notice; it does not adequately compensate for the financial losses caused by these last-minute cancellations.
The cancellation policy is stricter for workers than for parents. Any cancellation made by the workers results in the blocking or deletion of their accounts. Even in cases when parents have agreed in advance to a cancellation, workers may still be penalised by the platform. This has forced many workers to work even when they are sick.
"I think the fact that you can be cancelled at the last minute and have no guarantee of receiving payment has caused me a great deal of stress. There was a period of time when I relied on the bubble to pay my bills and cover my rent. I was always on high alert and constantly working because you never know when a cancellation might occur, leaving you without payment." Leticia
11 https://joinbubble.com/terms-of-use
4. Uneven review systems
Review systems are also a problem for childcare workers, as they face pressure to consistently exceed expectations in order to maintain a positive rating. Members have described how a negative rating can make it almost impossible to get jobs in the future.
The fear of receiving a negative evaluation can make it difficult for workers to assert their boundaries and refuse certain demands from parents or even the children they care for. For example, many workers had to perform additional non-childcare tasks, such as household chores, without being properly compensated for their efforts. In contrast, there is no supervision on the parents' side. It is common to see job postings with xenophobic and racist descriptions, where many parents clearly express their desire to have a nanny who speaks English as their first language and even explicitly state that they do not want black or Asian applicants.
"You always have the fear of receiving a negative review, and if you do, it becomes very challenging to get another job. in some cases, due to this fear, you may even accept tasks or responsibilities that are completely unrelated to childcare." Sara M
5. Lack of sick pay and holiday pay
Workers on these apps are not eligible for any of the protections or benefits of worker status including sick pay and holiday pay. As described above, many workers go to jobs while sick in order to avoid being barred from the platform or losing income. Our members have also described feeling that they must be ‘constantly available’ and the low hourly rates mean they cannot afford to take time off, for many even on weekends.
"That's not sick pay, so if you get sick or something similar, you still have to go to work, as they don't pay you and they can cancel or block your account." Sara B
Conclusion and recommendation
The in-home childcare sector in the UK has historically faced challenges related to informality and job insecurity. However, there have been positive developments in recent years, with some rights being granted to workers in this sector. For instance, employers are now obligated to contribute to pensions for caregivers and cleaners working in private homes. Furthermore, in 2021, the low pay commission recommended the removal of the minimum wage exemption for live-in domestic workers.
However, with the platformisation of domestic work, the rights of these workers are at risk, as there is no adequate regulation in place. What we have observed in childcare platforms in the UK and elsewhere is that they have harmed working conditions, reduced the value of work, misclassified workers, and created an imbalance in the power dynamics between employees and employers.
The platformisation of domestic work has contributed to the precariousness of the sector, compromising basic rights of workers. The lack of proper regulation allows platforms to operate without clear responsibilities, resulting in harmful practices for workers. The absence of labour protections such as minimum wage, regular working hours and benefits puts workers in vulnerable and exploitative situations.
Although we have focused on Bubble as the platform is the target of our member’s main complaints, we can observe that other platforms also fail to guarantee basic rights to workers, such as minimum wage and sick pay.
Based on these findings, we recommend that the Low Pay Commission recommends the implementation of minimum wage policies in the childcare platforms. Additionally, we suggest that the commission investigates whether workers on these apps are being misclassified as independent contractors, leading to their unjust exclusion from sick pay policies, holiday entitlements and pension contributions.
We express our appreciation to Dr. Jing Hiah and Dr. Natalia Sedecca for their significant contributions to the discussion on domestic workers in the gig economy and for providing their valuable input to this response.
Reference
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Mateescu, Alexandra, and Julia Ticona. 2020. “Invisible Work, Visible Workers - Visibility Regimes in Online Platforms for Domestic Work”. In Beyond the Algorithm: Qualitative Insights for Gig Work Regulation, edited by Deepa Das Acevedo. Cambridge: CUP.
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