Business travel counts as working time and must be included in the employers calculations. Even if your travel is delayed all the time must be included. It’s often a reason why people are underpaid.
Minimum Wage Specialists Ltd
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We provide strategic advice to businesses regarding the complex maze of National Minimum Wage rules and regulations - reducing the impact of HMRC NMW investigations by providing support to mitigate risks and provide advice with future NMW compliance.
Employers are required to count all the time someone works NOT just the contracted hours or shift time. Lots of people are being underpaid and HMRC are investigations businesses demanding that they repay any underpayments for the past 6 years.
There’s been a huge increase in workers reporting their employers to HMRC, for underpaying them. HMRC respond to every single complaint received. . Common reasons why people could be underpaid include working through lunch, working more than your contracted hours or doing compulsory training at home.
Many thousands of workers are being underpaid, often unintentionally but the consequences are significant.
In order for uk employers to correctly complete the annual excess hours calculation they must be able to evidence the actual working hours not just contracted hours.
Employers who require staff to wear Christmas jumpers to work are risking underpaying their staff. If it is a requirement staff wear spesific clothes to work and they don’t own a Xmas jumper they will need to buy one - the cost of buying the jumper will reduce their minimum wage pay when they buy it. This could lead to them being underpaid!
Not all pay shown on a payslip will count towards minimum wage pay. Some employers are incorrectly including certain elements of pay and it’s resulting in people being underpaid. Do you know what to include in each NMW calculation?
21+ years £12.71
18-20 years £10.85
16-17 years £8.00
Apprentice £8.00
Salary sacrifice arrangements are a main reason why people are paid below minimum wage. Lots of businesses are not treating the reduction correctly in their minimum wage calculations.
Employers must evidence the actual time worked not just the shift time or contracted hours. It’s catching lots of businesses out and creating lots of underpayments
DBS v Foy & Kemp: A Cautionary Tale on Working Hours & NMW Compliance
Even large government agencies with extensive HR support can face National Minimum Wage disputes over basic contractual terms. (https://shorturl.at/lBe3Z)
The Issue: Two employees argued they were paid for a 42-hour week (37 working hours + 5 hours paid breaks), pushing their hourly rate below Minimum Wage during 2023-2024. The DBS countered they were paid for 37 hours only, with unpaid breaks.
The Maths: If paid for 37 hours = hourly rate ABOVE NMW
If paid for 42 hours = hourly rate BELOW NMW
The Tribunal's Finding: Despite the confusion, the contracts were clear:
First claimant (CRB contract): "37 hours excluding meal breaks", no mention of paid breaks
Second claimant (ISA contract): "37 net hours (excludes daily meal breaks of one hour) making 42 gross hours", breaks explicitly excluded from pay
Claims dismissed. The employees were paid for 37 hours, meaning their rates exceeded NMW.
Key Takeaways:
Clarity matters - Even with "considerable HR support," there was "confusion and lack of clarity" about basic pay calculations
Gross vs Net - Understanding these terms is critical: gross hours include breaks, net hours don't
Express terms win - Without explicit contractual provision for paid breaks, they're assumed unpaid
Historic practices and contractual rights - 90+ years of Civil Service working patterns don't override written terms
For employers: Review your contracts NOW. Are working hours, breaks, and what's included in pay calculations crystal clear to all employees? Don’t get caught out.
If you wish to chat about anything around Minimum Wage compliance:
Contact [email protected]
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