Professional Comment

National Minimum Wage and Working Time: The Legal Issues

By Tom Draper, Employment Partner at Freeths (

Buckle in for a whistle-stop tour of some of the current employment law considerations businesses in the care sector are grappling with, including some tips on how to avoid an HMRC National Minimum Wage investigation and your obligations to your workers in respect of their working hours.

With ongoing staffing shortages in care homes there is a heightened risk that workers will be working extra hours to ensure that residents and vulnerable service users cared for properly. This creates legal risks for employers regarding payment of the national minimum wage and under the Working Time Regulations.

National Minimum Wage (NMW):
One glance at the current news headlines is enough to see the ongoing issue of the disparity between wages and the cost of living. However, little attention has been given to the substantial rise in the NMW which came in April or the cost and risks this may cause employers.

For those aged 23 & over NMW now sits at £9.50 per hour. This means that the NMW does not only cause concern for employers in relation to hourly paid workers now anyone engaged on a salary of around £20,000-£24,000 who is regularly working extra hours could now pose an NMW risk.

Workers need to receive the NMW for each pay period they work meaning that if they are paid weekly, they need to receive at least NMW for all the hours they work each week. All hours worked in addition to a worker’s contracted hours will be considered when calculating if NMW has been paid so it only takes a few additional hours to cause problems.

Steps to mitigate risk:
• Identify workers whose salaries are close to NMW;
• keep a record of hours worked for all employees, this is a legal obligation and would need to be provided if HMRC ever come calling;
• each pay period, whether that be weekly or monthly, consider the hours worked by the workers in question and calculate whether it sits above NMW.
• include deductions made from salaries for things like uniform or training as these can inadvertently reduce a worker’s salary below NMW.

The NMW regulations are complex so you should and always take professional advice if you are unsure about how to calculate the NMW.
Working Time Regulations 1998 (WTR): Unhelpfully there is a different legal definition or “time worked” under the NMW regulation and “working time” under the WTR.

The key difference is that the definition of working time for WTR purposes is wider. Working time for WTR includes time where the employee is at the employer’s disposal, such as where a worker is on call if the worker must be at a set location, such as the workplace.

Under the WTR employers must ensure that their workers are provided with the following rest breaks:
• at least 20 minutes when working more than six hours a day;
• 11 hours’ uninterrupted rest per day; and
• 24 hours’ uninterrupted rest per week (or 48 hours’ uninterrupted rest per fortnight)

Employers must also take all reasonable steps to ensure average working time does not exceed 48 hours per week (judged over a 17-week reference period) and there are heightened obligations for night workers.

While employers are able to agree an opt out from the 48-hour working week, if a worker is regularly working over 48 hours per week then it could cause concerns that the worker is not receiving adequate rest breaks under the WTR.

With workers often being asked to work longer hours due to the current labour shortage in the sector it is sensible for employers to have renewed focus on these issues.