National Minimum Wage guidance updated to reflect changes to calculating salaried-hours work

20 April 2020

The Department for Business, Energy and Industrial Strategy (BEIS) has updated guidance on calculating the minimum wage to reflect changes to the way that salaried-hours work can be calculated.

Salaried hours workers are workers who receive an annual salary in equal instalments for a set number of contracted hours.  Historically, only weekly and monthly paid staff could be classed as salaried workers, but changes permit additional payment cycles to be used for salary workers, including fortnightly and 4-weekly pay cycles. This will provide greater choice and flexibility to both employers and workers, whilst ensuring that workers are still protected.

The changes also allow for those workers who are paid hourly or payday and, as a result, have different paychecks each month, to be classified as salaried workers. This is particularly relevant to those in the retail industry. It is hoped that the amendments will help businesses employing these types of worker to comply with National Minimum Wage (NMW) legislation, as companies have admitted that they have previously found this difficult due to the differences in employee hours from one month to the next.

Employers will have the option to select the ‘calculation year’ appropriate to their workers to help them to monitor the hours worked by salaried workers more effectively, which, in turn, will make it easier for them to identify the potential underpayment of wages.

Salaried workers are also now entitled to receive premium pay without losing their entitlement to equal and regular instalments in pay.


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