Minimum wage and holiday pay

Hi, I am being paid the minimum wage for a job I am doing (I am not self employed and the minimum is what I should be getting). My employer tells me that they have included my holiday pay in my pay so I will get no extra amount (we can't take holiday while the job is going on). Is that right, or does holiday pay have to be paid on top of the minimum wage? Thanks!

Is there anyone from HMRC who can help?

You are entitled to receive the NMW rate per hour of work. You are also entitled to paid holiday. If the employer has legally brought in rolled up holiday pay this will be in your contract and shown on the payslip as a separate line, paid each pay period, otherwise it breaches the rules. Do please call ACAS 0300 123 1100 if this is not happening

Hi Louise C,
When calculating national minimum wage pay, a worker’s total remuneration in a pay reference period is reduced by any payments made for periods of absence from work; for example, when they are sick or on holiday.
Holiday pay should initially be included in the worker’s total remuneration. If the worker takes the holiday, then how this is treated depends on whether the worker is performing salaried hours work, time work, output work or unmeasured work. For more information, please refer to: Calculating the minimum wage Working hours for which the minimum wage must be paid
However, if the worker does not take the holiday, the holiday pay will remain included in the total remuneration and there is no corresponding reduction when calculating National Minimum Wage pay.
Thank you.

Hi, I have a similar query. I've just started working directly for a school. I'm currently paid £12/hr as an Exam Invigilator, working irregular hours and only working when required i.e. during mocks and national exams. My employer has told me this rate of £12, includes holiday pay entitlement. I have 2 questions. 1)Does this need to be shown separately on my payslip and 2) Am I being paid enough, bearing in mind the minimum wage is £11.44/hr? I have just worked 32.25 hours and on the HMRC "work out your holiday entitlement page" it shows that I am entitled to 4 hours holiday pay, so based on the above information, can anyone tell me if I am being correctly paid or not please? Could someone help answer this please as I cannot find any clear answers on either ACAS or HMRC to clarify. Thank you, Sally.

Hi Sally C,
HMRC cannot comment on specific arrangements without undertaking a full National Minimum Wage investigation.
HMRC can only provide general advice and signpost to available guidance.  
All workers are entitled to be paid at least the appropriate rate of NMW for every hour worked.
Please refer to the attached for information of holiday entitlement.
Building up holiday - Irregular hours and part-year workers - Acas 
If you are concerned that you are not being paid what you are entitled to you can raise a complaint to HMRC using our online form:  
National Minimum Wage enquiries and complaints 
Alternatively, if you require any further support, please seek independent legal advice, or contact The Advisory, Conciliation and Arbitration Service (ACAS) on 0300 123 1100.
Thank you.

 

Hi, if I am paid NMW and my employer is unable to allow me to take my full annual leave entitlement will this risk my pay falling below NMW? I will be working more hours annually than a colleague who is able to take full annual leave entitlement, but we will receive the same annual pay.

Hi, Thank you for your reply HMRC. I'm really struggling to understand this part of it: "If the worker does not take the holiday, the holiday pay will remain included in the total remuneration and there is no corresponding reduction when calculating National Minimum Wage pay". Does that mean that, if the worker does not take the holiday then the total remuneration should be the minimum wage PLUS the holiday pay?

Hi Louise C,
Please refer to the following example which demonstrates this:
In June, a worker is paid his monthly pay of £800, plus £200 for 2 week’s holiday pay. He is absent on holiday for the last two weeks of June. The worker’s total remuneration for that pay reference period is therefore £1000. However, the payment in respect of absence, in this case £200, is subsequently reduced from the calculation of National Minimum Wage pay. This will then result in the worker’s National Minimum Wage pay being £800 (£1000 minus £200).
However, if the worker is subsequently asked to work instead of taking his holiday no reduction will apply. As he does not actually have any time off the worker’s total remuneration for that pay reference period is £1000 and there is no reduction for any absences.
Please note that HMRC cannot comment on specific arrangements without undertaking a full National Minimum Wage investigation. HMRC can only provide general advice and signpost to available guidance.  
If you are concerned that you are not being paid what you are entitled to you can raise a complaint to HMRC using our online form:  
National Minimum Wage enquiries and complaints
Alternatively, if you require any further support, please seek independent legal advice, or contact The Advisory, Conciliation and Arbitration Service (ACAS) on 0300 123 1100.
Thank you.
 

Thank you but that really is absolutely no help at all. It seems such a shame that you can't just answer a straightforward question - you must surely know that your answer is unintelligible to the average person? I assume that ACAS will give me the same kind of answer so unless you are abe to give me a straightforward answer to my straightforward question, I have absolutely no idea what to do now.

Louise C - there are 2 issues here which ACAS will be able to help with. Legally you must take holiday each year at 5.6 weeks. The employer may include holiday pay at a minimum of 12.07% of your hourly rate and uplift the rate by this amount. So NMW is £11.44 the minimum hourly rate would be £12.82 - but this must be specifically reflected in your contract, otherwise you must be allowed to take paid time off as holiday at your contractual rate of pay. This is where ACAS will help as NMW is just to do with worked hours. At £12 an hour you should report your employer to HMRC if the contract states this includes your holiday pay, and also ACAS for nnot allowing you to take holiday

Hi Bridget,
HMRC cannot comment on specific arrangements without undertaking a full National Minimum Wage investigation.
HMRC can only provide general advice and signpost to available guidance.  
When calculating national minimum wage pay, a worker’s total remuneration in a pay reference period is reduced by any money payments paid in respect of periods of absence from work; for example, when they are sick or on holiday.
How the absence is treated depends on whether you are performing salaried hours work, time work, output work or unmeasured work.
For more information, please refer to: Working hours for which the minimum wage must be paid
If you are concerned that you are not being paid what you are entitled to you can raise a complaint to HMRC using our online form:  
National Minimum Wage enquiries and complaints
Alternatively, if you require any further support, please seek independent legal advice, or contact The Advisory, Conciliation and Arbitration Service (ACAS) on 0300 123 1100.
Thank you.