Hi,
Where a worker qualifies for the National Minimum Wage (NMW), it is important to firstly establish the type of work they perform for NMW purposes. The types of work are:
- Salaried hours work
- Time work
- Output work
- Unmeasured work
You must be certain that you have correctly determined the type of work that your workers perform as this affects how the rules are applied. For information on how to establish work type for NMW purposes, please see here:
Working hours for which the minimum wage must be paid
For example, where a time worker is absent from work and not working, the time spent absent is not counted as working time. It does not matter whether the absence is paid or not. Any payments made for the absence will be reduced from the workers total remuneration when calculating NMW pay.
Where a genuine salary sacrifice scheme is in place, the worker no longer has entitlement to that amount of pay under their contract. As this amount is ‘sacrificed’ by the worker, it reduces their pay and so cannot be used as part of their NMW pay. Guidance on salary sacrifice can be found here:
Salary sacrifice
Full guidance on calculating NMW pay for the various types or work can be found in the first link.
However, If you require advice relating specifically to arrangements that you have in place or are considering introducing, then please seek independent legal advice.
Thank you.
