PART 5Hours Worked for the Purposes of the National Minimum Wage
CHAPTER 2Salaried hours work
The meaning of salaried hours work21.
(1)
“Salaried hours work” is work which is done under a worker’s contract and which meets the conditions in paragraphs (2) to (5) of this regulation.
F1(2)
The first condition is that the worker is entitled under their contract to be paid—
(a)
an annual salary; or
(b)
an annual salary and one or both of—
(i)
a performance bonus; and
(ii)
a salary premium.
(3)
The second condition is that the worker is entitled under their contract to be paid that salary or salary and performance bonus F2or salary premium (or all three) in respect of a number of hours in a year, whether those hours are specified in or ascertained in accordance with their contract (“the basic hours”).
F3(4)
The third condition is that the worker is not entitled under their contract to a payment in respect of the basic hours other than—
(a)
an annual salary; or
(b)
an annual salary and one or both of—
(i)
a performance bonus; and
(ii)
a salary premium.
F4(5)
The fourth condition is that the worker is entitled under their contract to be paid, where practicable and regardless of the number of hours actually worked in a particular week, month or other period, in instalments which—
(a)
are equal and occur not more often than weekly and not less often than monthly; or
(b)
occur monthly and vary but have the result that the worker is entitled to be paid an equal amount in each quarter.
(6)
Circumstances where it may not be practicable to pay a worker by equal instalments, or by an equal amount in each quarter, include where—
(a)
a performance bonus is awarded;
F5(aa)
a salary premium is paid;
(b)
the annual salary is varied;
(c)
a payment is made in respect of hours in addition to basic hours; or
F6(d)
the employment starts or terminates during a week, month or other period provided for in paragraph (5)(a) with the result that the worker is paid a proportionate amount of their annual salary for that week, month or other period.
(7)
Work may be salaried hours work whether or not—
(a)
all the basic hours are working hours;
(b)
the worker works hours in excess of the basic hours (whether the worker is entitled to be paid for those additional hours or not);
(c)
the annual salary may be reduced due to an absence from work.
(8)
A “performance bonus” is a payment paid to a worker on merit attributable to the quality or amount of work done in the course of more than one pay reference period.
F7(9)
A “salary premium” is—
(a)
an amount of pay which is—
(i)
in addition to the annual salary; or
(ii)
an increase in the rate of pay for particular working hours;
(b)
in respect of the basic hours; and
(c)
attributable to working—
(i)
at a particular time of the day;
(ii)
on a particular day;
(iii)
at a particular location;
(iv)
in a particular working environment;
(v)
within a particular geographical area;
(vi)
on a particular task; or
(vii)
subject to a particular responsibility.