Tips and pitfalls of national minimum wage (NMW)

HMRC recently published the largest list to date of employers ‘named and shamed’ for failing to pay their staff the National Minimum Wage (NMW). This coincides with a number of high profile cases over the last few months, so employers need to take real care in ensuring that they are not inadvertently caught out by the myriad rules involved. Employers need to be familiar with not only the rates laid down by the legislation, but also the manner in which the hourly rate of pay is calculated in order to determine whether NMW has been paid for all hours worked.

As can be seen from many of the recent care sector cases, one of the biggest issues is to understand what hours need to be included as hours worked for NMW purposes. The action against the care company Sevacare has yet to be concluded. One of the bases of that claim concerns whether time spent travelling between clients’ homes counts as hours worked or should be counted as ‘off duty’. If proven to be work hours, the ramifications for the care sector are enormous.

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