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HMRC internal manual

National Minimum Wage Manual

Specific occupations & special groups: gangmaster supplied labour

The Gangmaster Licensing Authority was set up by The Gangmaster’s Licensing Act 2004. It aims to curb the exploitation of workers in the agriculture, forestry, horticulture, food processing and packaging and shellfish gathering industries. From 6 April 2006 labour providers in these sectors need to apply for a Gangmasters licence from the Gangmaster Licensing Authority to enable them to operate legally within the United Kingdom.

One of the conditions for obtaining and retaining a licence from the Gangmaster Licensing Authority is that the labour provider fulfils their obligations to pay at least the national minimum wage, in that “The worker is paid at least the national or agriculture minimum wage, taking into account the rules on accommodation offset.”

Whilst it is unlawful for an unregistered gangmaster to supply a worker the arrangements with the Gangmaster Licensing Authority does not affect the legality of any contractual relationship between the worker and the gangmaster or between the worker and a third party. A worker will be able to rely on his contractual right to receive at least the national minimum wage from whoever is responsible for paying his wages, regardless of whether the gangmaster is registered or not.

A number of government departments liaise to ensure businesses meet the licensing standards and conditions, including:

  • HM Revenue & Customs (NMWM02030)
  • Home Office - Immigration and Nationalities Directorate
  • Department for Work and Pensions
  • Health and Safety Executive
  • Department for Business, Innovation & Skills (NMWM02020).

Most workers supplied by gangmasters are likely to be agricultural workers (NMWM06020). Under no circumstances are compliance officers to investigate whether a gangmaster is licensed or not. However, if a compliance officer becomes aware of an employer who appears to be operating as an unlicensed gangmaster they should advise the National Minimum Wage Central Information Unit (NMWM02040).