PART 4Remuneration for the Purposes of the National Minimum Wage
CHAPTER 2Reductions
Determining the reductions which reduce the worker’s remuneration11.
(1)
In regulation 8, the reductions in the pay reference period are determined by adding together all of the payments or deductions treated as reductions in that period in accordance with this Chapter.
(2)
To the extent that any payment or deduction is required to be subtracted by virtue of more than one provision in this Chapter, it is to be subtracted only once.
Deductions or payments for the employer’s own use and benefit12.
(1)
Deductions made by the employer in the pay reference period, or payments due from the worker to the employer in the pay reference period, for the employer’s own use and benefit are treated as reductions except as specified in paragraph (2) and regulation 14 (deductions or payments as respects living accommodation).
(2)
The following deductions and payments are not treated as reductions—
(a)
deductions, or payments, in respect of the worker’s conduct, or any other event, where the worker (whether together with another worker or not) is contractually liable;
(b)
deductions, or payments, on account of an advance under an agreement for a loan or an advance of wages;
(c)
deductions, or payments, as respects an accidental overpayment of wages made by the employer to the worker;
(d)
deductions, or payments, as respects the purchase by the worker of shares, other securities or share options, or of a share in a partnership;
F1(e)
payments as respects the purchase by the worker of goods or services from the employer, unless—
(i)
the purchase is made in order to comply with a requirement imposed by the employer in connection with the worker’s employment; and
(ii)
the payment is not met, or intended to be met, by a payment paid to the worker by the employer.
Deductions or payments as respects a worker’s expenditureF213.
Deductions or payments as respects a worker’s expenditure
(1)
Subject to the exception in paragraph (2), the following deductions and payments are to be treated as reductions if the deduction or payment is paid by or due from the worker in the pay reference period—
(a)
deductions made by the employer as respects the worker’s expenditure in connection with the employment;
(b)
payments—
(i)
paid by or due from the worker to the employer as respects the worker’s expenditure in connection with the employment, or
(ii)
to any other person on account of such expenditure.
(2)
The payments referred to in subparagraph (1)(b) are not to be treated as reductions if the expenditure is met, or intended to be met, by a payment paid to the worker by the employer.
Deductions or payments as respects living accommodation14.
(1)
The amount of any deduction the employer is entitled to make, or payment the employer is entitled to receive from the worker, as respects the provision of living accommodation by the employer to the worker in the pay reference period, as adjusted, where applicable, in accordance with regulation 15, is treated as a reduction to the extent that it exceeds the amount determined in accordance with regulation 16, unless the payment or deduction falls within paragraph (2).
(2)
The following payments and deductions are not treated as reductions—
(a)
(b)
payments made to or deductions by a local housing authority or a registered social landlord in respect of the provision of living accommodation, except where the living accommodation is provided to the worker in connection with the worker’s employment with the local housing authority or registered social landlord.
(3)
For the purposes of this regulation—
“higher education institution” means an institution within the higher education sector as defined by section 91(5) of the Further and Higher Education Act 1992;
“local housing authority” means—
(a)
(b)
(c)
in Northern Ireland, the Northern Ireland Housing Executive;
“registered social landlord” means—
(a)
in England and Wales—
- (i)a private registered provider of social housing or a subsidiary or associate of such a provider, as defined in Part 2 of the Housing and Regeneration Act 200827, or
- (ii)
(b)
(c)
Deductions or payments as respects living accommodation adjusted for absences15.
(1)
The amount referred to in regulation 14 is to be adjusted in accordance with paragraph (2) if, in the pay reference period, a worker is absent from work and all of the following conditions are met—
(a)
the worker would be required to do time work but for the absence;
(b)
the worker is paid, for the hours of work during which the worker was absent, an amount not less than that which the worker would have been entitled to under these Regulations but for the absence;
(c)
the hours of work in the pay reference period are, by reason of the absence, less than they would be in a pay reference period containing the same number of working days in which the worker worked without reduced hours and for no additional hours;
(d)
the amount of the deduction or payment the employer is entitled to make or receive in respect of the provision of living accommodation to the worker during the pay reference period does not increase by reason of the worker’s absence from work.
(2)
The amount is adjusted by the formula—
where—
“A” is the amount of the deduction the employer is entitled to make or payment the employer is entitled to receive in respect of the provision of living accommodation by the employer to the worker during the pay reference period;
“B” is the number of hours of time work determined in accordance with Part 5;
“C” is the number of hours of work the worker would have worked in the pay reference period (including the hours of work actually worked) but for the absence.