We employ someone in the office on the national minimum wage rate as she is still learning the job and her contract says that she is supposed to work for 37.5 hours per week plus such other hours as are necessary for the requirements of the job. This is what we say for all our office staff. We do require these extra hours on a fairly regular basis e.g. month-end, it is not excessive and our staff just accept it as being part and parcel of the work here.
The young lady has now said that we have to pay overtime because otherwise we are in breach of the National Minimum Wage rules. We told her that this does not apply because she is in a clerical role which is paid monthly i.e. she has salaried status.
Unless you have not mentioned that she is employed under a contract of apprenticeship or is 21 or under and being paid the adult rate, then she is correct. There are no exceptions for monthly paid staff or salaried status etc. She should therefore be paid at least the minimum wage for all hours worked. There are some complicated rules in the Regulations but this is not one of them.
Statutory entitlements take precedence over any contractual ones. You should not just assume that the basic hourly rate you pay will cover all the hours an employee works and still be within the relevant National Minimum Wage rates. The average pay rate must not fall below the National Minimum Wage.
You have several options going forward, in addition to agreeing the appropriate amount of back-pay which you owe to her:
- Agree that she will get time off in lieu of extra hours worked.
- Pay her for the additional hours that she works which can be at single time not premium rates.
- Increase her salary to reflect the regular extra hours she is expected to work and monitor that to ensure she does not ‘slip’ again in any one reference period ie one month.
It is easy to fall foul of the National Minimum Wage, but it is important to be vigilant as there are serious implications for doing so:
- She could claim for an ‘unlawful deduction’ in an Employment Tribunal
- The HMRC can take firm action ie issue enforcement and penalty notices
- It is a criminal offence so could just result in a prosecution
- You could suffer from adverse publicity
It would be best to sort it out amicably as soon as possible.
The guidance provided in this article is just that – guidance. It is not legal advice as every case depends upon the facts. The law is forever changing and you need to keep up with these changes to ensure that you are behaving in the correct way.
Before you take any action make sure that you know what you are doing, or call us for specific advice.
