Some very significant payments are not taken into account. These include payments which do not form part of gross pay, such as loans; advances of wages; pension payments and retirement lump sums; redundancy payments; and rewards under a staff suggestion scheme.
Certain elements of gross pay are also excluded, in particular: overtime and shift premia payments; special allowances (such as unsocial hours payments, dangerous conditions payments, and location allowances).
Expenses or allowances for travel, clothing etc, are naturally excluded, as are refunds for money spent on materials, tools etc.
Deductions from wages which no not count include: those for expenditure connected with the job (eg for the provision of safety clothing and uniforms); and deductions for the employer's benefits (eg for meals provided). Similarly, if deductions are not made but the employee reimburses the cost of such provisions, these payments do not count.
Benefits in kind and accommodation
No benefits in kind (such as meals, luncheon vouchers, cars, and employers' pension contributions) count towards the minimum wage, except accommodation within specified limits.
For time workers and salaried staff, the hours for which the minimum wage is payable are normally: time spent at or near the workplace, travelling time on business and training time. Hours which do not count include travelling between home and work, rest breaks, holidays, sick leave and maternity leave, and industrial action.
In the case of workers paid by output, either the minimum wage must be paid for each hour worked, or an agreement made with the employer on a “fair estimate” of the hours likely to be spent. Similarly, for workers where hours are not specified – “unmeasured work” – either the minimum must be paid for each hour worked, or an agreement reached on the “daily average” of hours to be worked.
HMRC has been appointed as the main enforcement agency with wide powers of investigation, inspection, and enforcement. Workers have the right to inspect employers' records and can complain to an employment tribunal or court if they believe they are not being paid the minimum.
BIS guidance is at: http://www.direct.gov.uk/en/Employment/Employees/index.htm
Any employer found to be
paying their staff less than the national minimum wage has to pay arrears within seven days or face prosecution and new fines.
If the seven day deadline is missed, employers must pay a minimum fine of £224.70 per worker. And if they still refuse to pay, they risk prosecution and an additional £5,000 fine.
It is a criminal offence, with a maximum fine of £5,000, to:
Refuse, or wilfully neglect, to pay the national minimum wage;
Fail to keep proper records;
Keep false records;
Obstruct an enforcement officer or refuse to answer questions or provide information.