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Anyone who’s defined as a ‘worker’ (including employees and agency workers) is entitled to the National Minimum Wage (NMW) – you don’t need a written contract to be eligible.
If you’re unsure of your employment status then read our article “Am I an employee, self-employed, freelancer or worker?”
This article covers:
There is a government Helpline 0800 917 2368 and a website that offers more advice and information about the NMW.
The minimum wage is a legal right that covers almost all workers above compulsory school leaving age. There are different minimum wage rates for different age groups of workers as follows:
The rules about employing school leavers, now that the government have changed the law on how long young people are required to stay in education or training, are available in our “Employing School Leavers” article.
Agricultural Workers have slightly different rights to other workers, and more details are available here.
Workers who work on ‘piece work’ (or output work) have their NMW calculated slightly differently and you can read more details here.
From 18th June 2016, construction workers posted to the UK from another EU member state must be paid the UK NMW (under the Posted Workers Regulations).
There’s a government helpline, 0800 917 2368, and a website that offers more advice and information about the NMW.
To see a list of those excluded from the National Minimum Wage, click here.
For details about Equal Pay, see our equality article.
Here are details of the Voluntary Real Living Wage, which is not a statutory requirement although, in 2018, 4,700 employers across the UK have signed up to pay their staff at these higher rates. The real Living wage rose to £9.50 per hour in 2020, and £10.85 per hour in London.
The National Minimum Wage must be paid for all the time you are:
For ‘salaried’ workers who are paid their normal salary when they’re absent from work, which forms part of their contract, the time of absence counts for National Minimum Wage purposes, e.g. when on rest breaks, lunch breaks, holidays, sick leave or maternity leave.
In 2018, unpaid ‘trial shifts’ were in the news frequently, and at the end of the year, the government published guidance on the very limited instances when unpaid work trials may be legal. It’s important that employers are clear when they can ‘test’ applicants by asking them to do work without paying them.
The BBC reported in 2015 that MiHomeCare staff were being paid less than minimum wage. MiHomeCare is one of the largest care providers in the UK, and an internal company document seen by the BBC confirmed they hadn’t been paying its staff the NMW.
The BBC also reported the practise of ‘clipping’, where care appointments are scheduled back-to-back with no travel time scheduled between them. As a result, visits are clipped, or cut short. The company were nervous about the practice of clipping becoming public. You can see the BBC’s news article here.
In February 2016, law firm Leigh Day successfully negotiated a settlement from MiHomeCare for one carer, Caroline Barlow. Caroline had taken legal action against her ex-employer when she wasn’t paid for time spent for her travel; she was also being paid less than the National Minimum Wage, which constituted an unlawful deduction of wages.
The company settled Caroline’s claim for her travel time. Leigh Day believes “there are potentially thousands more care workers, working for MiHomeCare and other care providers, who are being paid less than the National Minimum Wage”. You can read more details here.
The European Court of Justice (ECJ) decided in September 2015 that travel time counts as working time. This applies when a worker doesn’t have a fixed place of work, but is required to travel from home at the beginning of the day to the premises of their customers, and to return home from the premises of another customer, following a list or route that the employer has provided.
Please note, this isn’t related to the minimum wage – only to travel time – but we have included the information here for clarity – you can read the details about travel time and pay in our article.
If you’re a genuine volunteer or voluntary worker you do not need to be paid the NMW – see our article about volunteering for more information.
Please note that the law relating to whether the NMW needs to be paid during ‘sleeping time’ whilst on-call and not working is complex, and case law is changing constantly – please see our guide to ‘sleeping on the job’ here.
Here’s what pay should be taken into account when calculating your average hourly rate of pay (during a pay reference period):
In 2018, Wagamama, TGI Fridays and Karen Millen were found to have breached NMW rules when they failed to compensate staff for having to buy ‘casual’ uniforms. TGIF and Wagamama required staff to purchase black shoes or black jeans/skirt to wear to work – in this case, the workers should receive an additional payment to compensate them for buying clothes, if buying these items brings their pay below NMW/NLW rates.
For National Minimum Wage purposes, there are four different types of work – time work, salaried hours work, output work and unmeasured work.
If you’re employed on ‘time work’ (you’re paid an hourly rate in relation to the time you work and your hours may vary) – you should receive the NMW for all time when you’re:
You can find more information in our guide to sleeping on the job.
If you’re employed on ‘salaried work’ (you’re paid an annual salary for set hours – in equal instalments – but your hours may vary), you should receive the NMW for all the time when you’re:
People who are paid on commission (entirely or partly on the basis of sales or deals made) or on output work/piecework (who are paid according to the amount they produce and don’t have set hours or start/finish times) must still be paid at least the National Minimum Wage.
These workers don’t have to be paid the minimum wage for each hour worked, but they must be paid the minimum wage, on average, for the time worked in their pay ‘reference’ period. This ‘reference’ period is the period of time a worker’s wage is actually calculated, e.g. on a weekly or monthly basis, but cannot be longer than one calendar month. This includes time spent travelling on business and to other work premises (from home, if you’re based there.
If you’re employed in ‘unmeasured work’ (work that’s not covered by any of the other three categories above [time, salaries, commission/outwork]), such as carrying out contractual duties for a flat rate, e.g. a home carer who lives and works in a client’s home before having a break, where there are certain tasks to be done but no specified hours or times when these tasks must be done.
Determining for what hours you should receive the NMW is difficult unless you’re employed on a ‘daily average hours agreement’, which is a written agreement that determines the average number of daily hours the worker is likely to spend on their duties – the NMW should be paid for these hours.
Workers who have entered into a ‘daily hours agreement’ don’t have to be paid the minimum wage for each hour worked, but must be paid the minimum wage on average for the time worked in their pay ‘reference’ period. This ‘reference’ period is time a worker’s wage is actually calculated, e.g. on a weekly or monthly basis but cannot be longer than one calendar month.
Where a worker hasn’t entered into a ‘daily hours agreement’ but is employed in unmeasured work, their employer must record the hours they work during the pay reference period and pay them for every hour worked. This includes time spent travelling on business and to other work premises (from home, if you’re based at home).
Agency workers and homeworkers are expressly covered by the NMW.
Apprentices receive the NMW for all their time spent working and training – where they’re employed on a Contract of Apprenticeship, on a publically funded apprenticeship or working under an Apprenticeship Agreement.
From 1st January 2011, an amendment to this law disallows employer’s schemes that allow part of a worker’s pay to be replaced with expenses payments for travel – this part of their pay now lies outside the pay counted for National Minimum Wage purposes.
For information about what happens when your employer declares ‘short-time’ working, see our Written Statements, contracts, and changing terms in your contract article.
Overtime normally means any hours worked over and above your normal contractual working hours. However, there are different types of overtime:
There’s no legal right to pay employees for working extra hours. However, there are some extra caveats and clauses you need to be aware of when it comes to working overtime:
Acas have produced a comprehensive guide to overtime which you can read here.
The minimum wage legislation can make unpaid work experience/internships a grey area, as anyone defined as a ‘worker’ is entitled to a minimum wage. government guidelines say that if someone is taken on solely as a volunteer, for the reason of giving them skills/training, rather than in a normal employee-employer relationship, this can be paid – as long as they have no set hours, are under no obligation to perform the work and can come and go freely.
Students doing work experience as part of a higher or further education course aren’t entitled to the minimum wage if the work experience they undertake is for under a year’s duration.
The government-run Pay and Work Rights Helpline which can advise you about the NMW: 0800 917 2368. You can report NMW abuses to them on this number.
Your employer must keep records that show they’ve paid the NMW for three years, and you have the right to inspect these records if you’ve reasonable grounds to believe you’ve not been paid the NMW; you may complain to an Employment Tribunal if you’re not allowed to see these records. From 1st April 2021, the period increases, and your employer must keep these records for six years.
Workers also have a right not to be subjected to any detriment from their employer for any action taken to enforce their statutory right to be paid the NMW.
The National Minimum Wage Regulations are enforced by the HMRC, who employ compliance and enforcement officers and prosecute employers for not abiding by the NMW. From February 2014, the fines for employers who don’t pay their workers the National Minimum Wage increase from £5,000 up to £20,000. The Small Business, Enterprise and Employment Act (approved by Parliament in March 2015), which became effective from 1st April 2016, will allow for the maximum £20,000 penalty for non-payment to apply for each worker who hasn’t been paid the NMW (not just one fine per non-compliance notice).
From 6th April 2020, the government are making a small number of changes to the NMW 2015 regulations. These include: