The National Minimum Wage (Amendment) (No. 2) Regulations 2020 setting out new provisions relating to salaried hours work and reduction from wages impacting on the minimum wage come into force on 6 April 2020. The 2020 Regulations are fairly complex, and employers may wish to consider taking legal advice in terms of implementation, but in summary:
Salaried hours work: A salary premium is an additional amount of pay for working in defined circumstances, e.g. a night working or bank holiday working premium. The salary premium may be a separate amount that is in addition to the worker’s salary, or it may be an increase in the worker’s rate of pay for particular working hours. Under the 2020 Regulations, where a worker receives a fixed salary premium, it will not form part of the worker’s remuneration for minimum wage purposes. If the salary premium is by way of an increase in the worker’s rate of pay, e.g. a higher hourly rate for working on a bank holiday, then only the amount of the increase is discounted. This means employers can pay premiums without falling outside the definition of salaried hours work.
Reductions from wages: (a) Where a worker purchase goods or services from their employer and the purchase is made to comply with a requirement imposed by the employer, then this will not be a reduction if the employer reimburses the worker for the purchase (or intends to do so); (b) Payments paid by, or due from, the worker to the employer in respect of a worker’s expenditure in connection with their employment will not constitute a reduction if the employer reimburses the worker (or intends to do so).
This provides summary information and comment on the subject areas covered. Where employment tribunal and appellate court cases are reported, the information does not set out all of the facts, the legal arguments presented and the judgments made in every aspect of the case. Employment law is subject to constant change either by statute or by interpretation by the courts. While every care has been taken in compiling this information, we cannot be held responsible for any errors or omissions. Specialist legal advice must be taken on any legal issues that may arise before embarking upon any formal course of action.
