- The National Minimum Wage (Amendment) Regulations 2020.
- Byrne Brothers (Formwork) Ltd v Baird and Others (2002) IRLR 96.
- Royal Mencap Society v Tomlinson-Blake (2018) UKSC 2018/0160.
- Shannon v Rampersad and another (T/A Clifton House Residential Home) (2018) UKSC 2018/0161.
The National Minimum Wage (Amendment) Regulations 2021 has increased the minimum wage from April 2021 as follows:
The amendment also substituted the 25-year-old age bracket to over 23 years old. This is significant for young workers who will now gain an extra £1.91 per hour.
Types of work:
Salary Work: Basic hours on a yearly basis, based on an annual amount exclusive of performance bonus payments. Usually paid in monthly/weekly instalments.
Time Worked: Paid per hour for the length of time they’ve worked.
Output Work: Commissioned work, paid per piece of work usually without set hours.
National Minimum Wage:
Remuneration received through employment includes a salary, bonuses, overtime, commission, and accommodation allowance. Some reductions reduce the pay for National Minimum Wage. These include reductions for bike to work schemes, childcare vouchers, uniform, specific tools, and employee discounted goods. If deductions are taken for employee pension contributions, tax/national insurance, and trade union payments these deductions will not reduce the pay for national minimum wage.
You must calculate the national minimum wage in pendent with the payment received devisable by the hours worked to ensure they are not below the abovementioned payment amounts per age bracket. When looking towards what constitutes hours worked it is different for each of the types of work.
Lunch and rest breaks do not count towards ‘hours worked’, however, overtime hours and pre/post shift hours will count towards time worked. Pre and Post shift obligations can include handovers, PPE and security checks if applicable to the specific type of job. Travel time is only counted as ‘hours worked’ if it is for work purposes, this excludes travel to and from work.
Lunch and rest breaks will count if they are paid, in terms of overtime if they are in excess of the contracted annualised hours they will count. This will mean employers keeping a thorough time sheet detailing all over-time to also include pre/post shift time. Travel time, as with time worked, will only count if it is for work purposes and excludes travel to and from work.
Often overlooked by employers, in both the abovementioned categories of payment worker training time does count as hours worked. If you are paid hourly as an employee training outside normal working hours, if set, will have to be calculated towards your earnings to ensure receipt of national minimum wage.
Establishing employment status: National minimum wage is only applicable to employees and those under the special category of “worker”. However, there has been many challenges due to the ambiguity around what separates the two categories of worker and self-employed. Whilst we have cases such as Byrne Brothers, many workers could be denied the right to national minimum wage as they are engaged on what they believe to be a self-employed sub-contractor basis.
Sleep-in shifts: With the recent judgment in the case of Royal Mencap Society v Tomlinson Blake and Shannon v Rampersad the Supreme Court ruled that workers and employees alike are only entitled to national minimum wage for the hours they are awake and working and not when sleeping. Instead, they are entitled to an allowance for their sleep-in night shift.
National minimum wage is not complex but requires monitoring to ensure complete compliance. Those employers who do not comply with the set amounts can find themselves in legal proceedings within the Employment Tribunals for arrears of wages in which they will have to pay the employee back the monies owed at the current minimum wage rate regardless of when the year was, and rate was at same.
- Claire Louise Mooney, People & Safety Consultant