Salary Sacrifice and NMW

We are about to set up a Salary Sacrifice EV scheme. We are aware that employees must still earn NMW after salary sacrifice. We have a number of employees who are contracted to basic pay + shift premium. If these employees are absent from work due to sickness, they lose their shift premium. Whilst the employee, after salary sacrifice would still earn NMW, in any normal month, if when absent and losing shift premium, this would drop their income to below minimum wage for that particular period of absence, Would this still be within the rules of NMW or would this employee therefore not be eligible for the EV sal sac scheme in case of the event of losing shift premium due to absence.

Hi,

If you pay a worker at a higher rate than their standard pay for some of the work that they do, such as a shift premium, the premium element of pay, that is, the amount by which the higher pay rate exceeds the worker’s basic rate, may not count towards minimum wage pay.

Wrongly including an element of pay that does not count can result in it appearing that the minimum wage is being paid when in fact it is not.

For further information, please refer to the section ‘ Overtime and shift premia’ within the Department for Business and Trade publication ‘Calculating the minimum wage’ which is available here:

Calculating the minimum wage

Thank you.