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When is a salaried worker not salaried for the purposes for the minimum wage and why does it matter?

National minimum wage is calculated on the basis of how your workers are paid. This is important as different rules can apply for the calculation to be correct.

First a reminder that there are different ways of checking that workers get the minimum wage depending on whether they are: time work, salaried -hours work or output and unmeasured work.

You can find more information here.

Just because the contract states they are a salaried worker is not sufficient for national minimum wage purposes, you need to confirm all the following conditions apply:

1. they are under a contract to do salaried-hours work.

2. they are paid under their contract for a set basic number of hours in a year - salaried hours workers' contracts might not stats the basic number of hours as an annual figure, but it must be possible to work this out. (Where a contract specifies "at least 40 hours per week", then it is not possible to ascertain the exact number of basic hours and the worker will not be performing salaried hours work.)

3. they are entitled under their contract to an annual salary for those hours.

4.they are paid in equal weekly or monthly instalments - e.g. 12 monthly or 52 weekly instalments - where a contract specifies that a worker is paid their salary in any other pattern, for example, every 4 weeks, per term for 3 each year or per fortnight then salaried hours work is not appropriate.


Need more information, ask us a question on this forum or check the more detailed guidance here or call the ACAS helpline for free confidential an impartial advice.