PART 5

Hours Worked for the Purposes of the National Minimum Wage
CHAPTER 2

Salaried hours work

The meaning of salaried hours work
21
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.
2
The first condition is that the worker is entitled under their contract to be paid an annual salary or an annual salary and performance bonus.
3
The second condition is that the worker is entitled under their contract to be paid that salary or salary and performance bonus 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”).
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 an annual salary or an annual salary and performance bonus.
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 or month—
a
in equal weekly or monthly instalments, or
b
in monthly instalments that 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;
b
the annual salary is varied;
c
a payment is made in respect of hours in addition to basic hours; or
d
the employment starts or terminates during a week or month with the result that the worker is paid a proportionate amount of their annual salary for that week or month.
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.