Statutory Instrument 1999 No. 584

The National Minimum Wage Regulations 1999

(The document as of February, 2008)

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STATUTORY INSTRUMENTS

1999 No. 584

TERMS AND CONDITIONS OF EMPLOYMENT

The National Minimum Wage Regulations 1999

	Made	6th March 1999
	Coming into force	1st April 1999

ARRANGEMENT OF REGULATIONS

PART I
GENERAL AND INTERPRETATION

1.	Citation and commencement.

Interpretation

2.	General interpretative provisions.

3.	The meaning of time work.

4.	The meaning of salaried hours work.

5.	The meaning of output work.

6.	The meaning of unmeasured work.

7.	Travelling.

8.	The meaning of payments.

9.	Benefits in kind not to count as payments.

10.	The pay reference period.

PART II
THE RATE OF THE NATIONAL MINIMUM WAGEThe rate and exclusions

11.	The rate of the national minimum wage.

12.	Workers who do not qualify for the national minimum wage.

13.	Workers who qualify for the national minimum wage at a different rate.

Calculation of the hourly rate

14.	Method of determining whether the national minimum wage has been paid.

PART III
WORKING TIME FOR THE PURPOSES OF THE NATIONAL MINIMUM WAGEProvisions in relation to working time

15.	Provisions in relation to time work.

16.	Provisions in relation to salaried hours work.

17.	Provisions in relation to output work.

18.	Provisions in relation to unmeasured work.

19.	Time spent on training to be time work.

The hours worked in a pay reference period

20.	Time work.

21.	Salaried hours work.

22.	Determining the hours of salaried hours work where the basic hours have been exceeded.

23.	Determining the hours of salaried hours work in certain cases where the employment terminates.

24.	Output work.

25.	"Fair estimate" agreements for output work.

26.	Determining the hours of output work where there is a "fair estimate" agreement.

27.	Unmeasured work.

28.	"Daily average" agreements for unmeasured work.

29.	Determining the hours of unmeasured work where there is a "daily average" agreement.

PART IV
REMUNERATION COUNTING TOWARDS THE NATIONAL MINIMUM WAGE

30.	Payments to the worker to be taken into account.

31.	Reductions from payments to be taken into account.

32.	Deductions to be subtracted under regulation 31(1)(g).

33.	Deductions not to be subtracted under regulation 31(1)(g).

34.	Payments made by or due from a worker to be subtracted under regulation 31(1)(h).

35.	Payments not to be subtracted under regulation 31(1)(h).

36.	Amount permitted to be taken into account where living accommodation is provided.

37.	Adjusted deductions and payments in respect of living accommodation.

PART V
RECORDS

38.	Records to be kept by an employer.

Whereas a draft of the following Regulations was laid before Parliament in accordance with section 51(5) of the National Minimum Wage Act 1998[1] and approved by resolution of each House of Parliament:

    And whereas the Secretary of State, before the Act came into force, referred to the Low Pay Commission matters corresponding to each of the matters required, by section 5(1) of the Act, to be referred to the Commission before the making of the first regulations under sections 1(3), (4) or 2 of the Act:

    And whereas that referral is, by virtue of section 8(3) of the Act, to be treated as the referral required by section 5(1) of the Act unless the Secretary of State otherwise determines, and he has not so determined:

    And whereas the report of the Low Pay Commission containing the Commission's recommendations about each of the matters referred was made to the Prime Minister and the Secretary of State before the Act came into force:

    And whereas that report is, by virtue of section 8(5) of the Act, to be treated as the report of the Low Pay Commission under section 5(3) of the Act on the referral unless the Secretary of State has determined as mentioned in the third recital:

    And whereas the Secretary of State, in accordance with section 5(4) of the Act, has laid a report before each House of Parliament containing a statement of the reasons for his decision to act in a manner falling within paragraphs (b), (d) and (e) of that section:

    Now, therefore, the Secretary of State, in exercise of the powers conferred on him by-

(a) sections 1(3) and (4), 2 and 3,

(b) section 9 (as extended by section 3A(1) of the Agricultural Wages Act 1948[2], section 3A(1) of the Agricultural Wages (Scotland) Act 1949[3] and Article 8A(1) of the Agricultural Wages (Regulation) (Northern Ireland) Order 1977[4]), and

(c) section 51,

of the National Minimum Wage Act 1998 hereby makes the following Regulations:-

PART I
GENERAL AND INTERPRETATION
Citation and commencement
    1.These Regulations may be cited as the National Minimum Wage Regulations 1999 and shall come into force on 1st April 1999.

Interpretation
General interpretative provisions
    2. - (1) In these Regulations-

"the Act" means the National Minimum Wage Act 1998.

"allowance", other than in regulation 8(b), means any payment paid by the employer to a worker attributable to a particular aspect of his working arrangements or to his working or personal circumstances that is not consolidated into his standard pay, but does not include an allowance designed to refund a worker in respect of expenses incurred by him in connection with his employment;

"arrangements made by the Government" means-

(a) in England and Wales, arrangements made by the Secretary of State under section 2 of the Employment and Training Act 1973[5],

(b) in Scotland, arrangements made by the Secretary of State under section 2 of the Employment and Training Act 1973 or by Scottish Enterprise or Highlands and Islands Enterprise under section 2 of the Enterprise and New Towns (Scotland) Act 1990[6],

(c) in Northern Ireland, arrangements made by the Department of Economic Development under section 1 of the Employment and Training Act (Northern Ireland) 1950.[7];

"employer" has the meaning given to it by section 54(4) of the Act but, in relation to a worker (as defined in section 54(3) of the Act), includes in addition, except in paragraph (6) of regulation 12-

(a) an agent or principal in relation to whom, by virtue of section 34(2) of the Act, the provisions of the Act have effect as if there were a worker's contract between him and an agency worker for the doing of work by the agency worker, and

(b) an employer of a home worker who is a worker by virtue of section 35 of the Act;

"performance bonus" means a performance bonus or other merit payment attributable to the quality or amount of work done in the course of more than one pay reference period, and not therefore payable directly in respect of work done in specific hours;

"the total of reductions" means the total of reductions determined in accordance with regulations 31 to 37;

"the total of remuneration" means the total of money payments determined in accordance with regulation 30;

"pay reference period" has the meaning assigned to it by regulation 10;

"worker" has the same meaning as in section 54(3) of the Act but, except in paragraph (6) of regulation 12, includes in addition-

(a) an agency worker in relation to whom, by virtue of section 34(2) of the Act, the provisions of the Act have effect as if there were a worker's contract for the doing of his work between him and an agent or principal; and

(b) a home worker who is a worker by virtue of section 35 of the Act.

    (2) In these Regulations "work" does not include work (of whatever description) relating to the employer's family household done by a worker where the conditions in sub-paragraphs (a) or (b) are satisfied.

(a) The conditions to be satisfied under this sub-paragraph are-


(i) that the worker resides in the family home of the employer for whom he works,

(ii) that the worker is not a member of that family, but is treated as such, in particular as regards to the provision of accommodation and meals and the sharing of tasks and leisure activities;

(iii) that the worker is neither liable to any deduction, nor to make any payment to the employer, or any other person, in respect of the provision of the living accommodation or meals; and

(iv) that, had the work been done by a member of the employer's family, it would not be treated as being performed under a worker's contract or as being work because the conditions in sub-paragraph (b) would be satisfied.



(b) The conditions to be satisfied under this sub-paragraph are-



(i) that the worker is a member of the employer's family,

(ii) that the worker resides in the family home of the employer,

(iii) that the worker shares in the tasks and activities of the family,



and that the work is done in that context.

    (3) In these Regulations "work" does not include work (of whatever description) relating to an employer's family business, done by a worker who satisfies the conditions in paragraph (4).

    (4) The conditions to be satisfied under this paragraph are-

(i) that the worker is a member of the employer's family,

(ii) that the worker resides in the family home of the employer,

(iii) that the worker participates in the running of the family business,



and that the work is done in that context.

The meaning of time work
    3.In these Regulations "time work" means-

(a) work that is paid for under a worker's contract by reference to the time for which a worker works and is not salaried hours work;

(b) work that is paid for under a worker's contract by reference to a measure of the output of the worker per hour or other period of time during the whole of which the worker is required to work, and is not salaried hours work; and

(c) work that would fall within paragraph (b) but for the fact that the worker is paid by reference to the length of the period of time alone when his output does not exceed a particular level.

The meaning of salaried hours work
    4. - (1) In these Regulations "salaried hours work" means work-

(a) that is done under a contract to do salaried hours work; and

(b) that falls within paragraph (6) below.

    (2) A contract to do salaried hours work is a contract under which a worker-

(a) is entitled to be paid for an ascertainable basic number of hours in a year (referred to in this regulation as "the basic hours"); and

(b) is entitled, in respect of hours that consist of or include the basic hours, to be paid an annual salary-


(i) by equal weekly or monthly instalments of wages, or

(ii) by monthly instalments of wages that vary but have the result that the worker is entitled to be paid an equal amount in each quarter,



regardless of the number of hours in respect of which the worker is entitled to the annual salary that are actually worked by him (if any) in any particular week or month; and

(c) has, in respect of those hours, no entitlement to any payment other than his annual salary or no such entitlement other than an entitlement to a performance bonus.

    (3) A contract that satisfies the conditions in paragraph (2) does so-

(a) whether or not all the basic hours are working hours;

(b) whether or not the worker can be required under his contract to work, or does in fact work, any hours in addition to the total of hours in respect of which he is entitled to his annual salary, and regardless of any payments made in respect of those additional hours.

    (4) Circumstances having the result that in practice a worker may not be or is not paid by equal instalments of wages, or by an equal amount in each quarter, for hours in respect of which he is entitled under his contract only to his annual salary do not prevent the contract from being a contract for salaried hours work, for example-

(a) that a worker may be awarded a performance bonus,

(b) that the amount of a worker's annual salary may be varied,

(c) that by virtue of regulation 22 or 23 the worker is entitled to the national minimum wage in respect of hours in addition to his basic hours when, under his contract, there is no entitlement to any payment in addition to his annual salary for those additional hours (or to no payment in addition other than a performance bonus), and

(d) that the worker's employment may start or terminate during a week or month with the result that the worker is paid a proportionate amount of his annual salary for the week or month in question.

    (5) The fact that, by reason of an absence from work for hours in respect of which his annual salary is normally payable, a worker is entitled under his contract, in respect of those hours, to be paid less than he would be but for the absence or to no payment does not prevent the worker's contract from being a contract for salaried hours work.

    (6) The work done under a contract to do salaried hours work that falls within this paragraph, and is therefore salaried hours work, is work in respect of which the worker is entitled to no payment in addition to his annual salary, or to no payment in addition to his annual salary other than a performance bonus.

    (7) References in regulation 22 to work or hours of work in respect of which a worker is entitled to no payment other than his annual salary refer also to work or hours of work in respect of which the only payment to which the worker is entitled other than his annual salary is payment of a performance bonus.

The meaning of output work
    5.In these Regulations "output work" means work that is paid for under a worker's contract that is not time work and, but for the effect of the Act and these Regulations or anything done pursuant to these Regulations, would be paid for under that contract wholly by reference to the number of pieces made or processed by the worker, or wholly by reference to some other measure of output such as the number or value of sales made or transactions completed by the worker or as a result of his work.

The meaning of unmeasured work
    6.In these Regulations "unmeasured work" means any other work that is not time work, salaried hours work or output work including, in particular, work in respect of which there are no specified hours and the worker is required to work when needed or when work is available.

Travelling
    7.A worker is to be treated as travelling for the purposes of regulations 15(2), 16(2) and (5)(b), 17(1), 18(1) and 19(1)(b) if-

(a) he is in the course of a journey by a mode of transport or is making a journey on foot;

(b) he is waiting at a place of departure to begin his journey by a mode of transport;

(c) where his journey is broken, he is waiting at a place of departure for his journey to re-commence either by the same or another mode of transport, except for any time during such a period he spends in taking a rest break; or

(d) he is waiting at the end of a journey, in the case of regulations 15(2), 16(2), 17(1) and 18(1), for the purpose of carrying out his duties, or, in the case of regulations 16(5)(b) and 19(1)(b), to receive training, except for any time before he is due to carry out his duties or receive training which he spends in taking a rest break.

The meaning of payments
    8.References in these Regulations to payments paid by the employer to the worker are references to payments paid by the employer to the worker in his capacity as a worker before any deductions are made, excluding-

(a) any payment by way of an advance under an agreement for a loan or by way of an advance of wages;

(b) any payment by way of a pension, by way of an allowance or gratuity in connection with the worker's retirement or as compensation for loss of office;

(c) any payment of an award made by a court or tribunal or to settle proceedings which have been or might be brought before a court or tribunal, other than the payment of an amount due under the worker's contract;

(d) any payment referable to the worker's redundancy;

(e) any payment by way of an award under a suggestions scheme.

Benefits in kind not to count as payments
    9.For the purposes of these Regulations the following shall not be treated as payments by the employer to the worker-

(a) any benefit in kind provided to the worker, whether or not a monetary value is attached to the benefit, other than living accommodation;

(b) any voucher, stamp or similar document capable of being exchanged for money, goods or services (or for any combination of those things) provided by the employer to the worker.

The pay reference period
    10. - (1) The pay reference period is a month or, in the case of a worker who is paid wages by reference to a period shorter than a month, that period.

    (2) When a worker's contract terminates regulations 14 and 30 to 37 shall be applied in relation to payments made in the period of a month beginning with the day immediately following the last day on which the worker worked under the contract as if such payments had been made in the worker's final pay reference period.

PART II
THE RATE OF THE NATIONAL MINIMUM WAGE
The rate and exclusions
The rate of the national minimum wage
    11.The single hourly rate of the national minimum wage is £3.60.

Workers who do not qualify for the national minimum wage
    12. - (1) Workers who have not attained the age of 18 do not qualify for the national minimum wage.

    (2) A worker who-

(a) has not attained the age of 26,

(b) is employed under a contract of apprenticeship or, in accordance with paragraph (3), is to be treated as employed under a contract of apprenticeship, and

(c) is within the first 12 months after the commencement of that employment or has not attained the age of 19,

does not qualify for the national minimum wage in respect of work done for his employer under that contract.

    (3) A worker is to be treated as employed under a contract of apprenticeship for the purposes of paragraph (2)(b) if, and only if, he is engaged under the arrangements made by the Government known as Modern Apprenticeships.

    (4) For the purposes of paragraph (2)(c) a worker does not commence employment with an employer where he has previously been employed by another employer and continuity of employment is preserved between the two employments by or under any enactment.

    (5) A worker who is participating in a scheme, designed to provide him with training, work experience or temporary work, or to assist him in seeking or obtaining work, which is either-

(a) a scheme, not being one falling within sub-paragraph (b), provided to him under arrangements made by the Government (other than arrangements falling within paragraph (3)), or

(b) funded in whole or part under the European Social Fund,

does not qualify for the national minimum wage in respect of work done for his employer as part of that scheme except to the extent that paragraph (6) or (7) otherwise provides.

    (6) Paragraph (5) does not apply to a worker who is participating in a scheme falling within sub-paragraph (a) of paragraph (5) if he is employed by the employer for whom he works under the scheme, unless the worker is engaged, for a period not exceeding three weeks, in a trial period of work with a prospective employer under arrangements made by the Government.

    (7) Paragraph (5) does not apply to an employee who is participating in a scheme falling within sub-paragraph (b) of paragraph (5) if he is employed by the employer for whom he works under the scheme, unless the employee is engaged, for a period not exceeding three weeks, in a trial period of work with a prospective employer under arrangements made by the Government.

    (8) A worker who-

(a) is attending a higher education course-


(i) the standard of which is not higher than that of a first degree course, or

(ii) which is a course of initial training for teachers, and



(b) before the course ends is required, as part of that course, to attend a period of work experience not exceeding one year, does not qualify for the national minimum wage in respect of work done for his employer as part of that course.

    (9) For the purposes of paragraph (8) a "higher education course" means-

(a) in England and Wales, a course of a description referred to in Schedule 6 to the Education Reform Act 1988[8];

(b) in Scotland, a course of a description falling within section 38 of the Further and Higher Education (Scotland) Act 1992[9];

(c) in Northern Ireland, a course of a description referred to in Schedule 1 to the Further Education (Northern Ireland) Order 1997[10].

    (10) A worker who satisfies the condition set out in paragraph (11) and is participating in a scheme which satisfies the conditions set out in paragraph (12), under which he is provided with shelter and other benefits (which may include money benefits) in return for performing work, does not qualify for the national minimum wage in respect of work performed for his employer under that scheme.

    (11) A worker satisfies the condition referred to in paragraph (10) if, immediately before his entry into the scheme-

(a) he was either homeless or residing in a hostel for homeless persons; and

(b) he-


(i) was in receipt of, or entitled to, income support or income-based job seekers' allowance, or

(ii) was not entitled to receive either of those benefits only because he was not habitually resident in the United Kingdom.

    (12) A scheme satisfies this paragraph if-

(a) the arrangements under which the scheme operates prevent the person operating the scheme or any other person from making a profit out of the provision of the scheme, other than one which may only be applied in running the scheme or other schemes satisfying the requirements of this paragraph or, where the person operating the scheme is a charity, for a purpose, being a purpose of the charity, relating to the alleviation of poverty;

(b) every person participating in the scheme satisfies the condition set out in paragraph (11), or would satisfy it if he were a worker;

(c) the accommodation available under the scheme is provided by the person operating the scheme or under arrangements made between that person and another person; and

(d) the work done under the scheme is both provided by, and performed for, the person operating the scheme.

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Notes:

[1] 1998 c. 39.back

[2] 1948 c. 47; section 3A(1) is to be inserted by paragraph 3 of Schedule 2 to the National Minimum Wage Act 1998 (c. 39).back

[3] 1949 c. 30; section 3A(1) is to be inserted by paragraph 13 of Schedule 2 to the National Minimum Wage Act 1998 (c. 39).back

[4] S.I. 1977/2151 (N.I. 22); Article 8A(1) is to be inserted by paragraph 26 of Schedule 2 to the National Minimum Wage Act 1998 (c. 39).back

[5] 1973 c. 50; section 2 was substituted by section 25(1) of the Employment Act 1988 (c. 19); subsections (3A) and (3B) were inserted in respect of Scotland only by section 47(1) of the Trade Union Reform and Employment Rights Act 1993 (c. 19); and subsections (4) and (6) were repealed by the Employment Act 1989 (c. 38), Schedule 7, Part I.back

[6] 1990 c. 35; section 2 was amended by the Trade Union Reform and Employment Rights Act 1993 (c. 19), section 47(4) and Schedule 10.back

[7] 1950 c. 59; as amended by S.I. 1988/1087 (N.I. 10) and S.I. 1990/1200 (N.I. 8).back

[8] 1988 c. 40.back

[9] 1992 c. 37; section 38 was amended by the Education (Scotland) Act 1996 (c. 43), Schedule 5, paragraph 9.back

[10] S.I. 1997/1772 (N.I. 15).back

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