National Minimum Wage Regulations: What Employers Need to Know   

As an employer, it’s essential to understand your responsibilities to your team. Paying people correctly matters not only to your employees, but also to the reputation of your business.

One major issue, particularly in the care sector, is the risk of underpayment. Employers who underpay workers can face serious consequences, including penalties of up to 200% of the underpaid amount (capped at £2,000 per worker). In 2023 alone, £13.6 million was repaid to over 100,000 workers following National Minimum Wage breaches.

Understanding the key rules around National Minimum Wage (NMW) regulations can help employers avoid common pitfalls and stay compliant.

This guide explains the key rules employers need to follow.

What Counts as Working Time? 

Understanding what constitutes “working time” for NMW purposes is essential. Many employers and workers don’t fully understand that activities like travel between clients, attending training, and even waiting for clients count as working time.

Common Areas Employers Get Wrong

Training and Meetings

 Any time spent in mandatory training sessions, whether it’s induction training, ongoing professional development, or team meetings, counts as working time. This applies even if the training is outside of normal working hours or on a worker’s day off.  

• Example: A care worker, James, is asked to attend a two-hour health and safety training on his day off. This is mandatory training required by the employer, so the employer must pay these two hours.  

Travel Time

Employers must count travel between clients during a shift as working time. For example, if a care worker is assigned multiple home visits in one day, employers must pay for the time spent travelling between those clients. However, travel from the worker’s home to their first client and from their last client back home does not count as working time unless the employer has requested them to stop at a specific location along the way.

• Example: A care worker, Maria, travels from her home to visit her first client at 9:30 a.m. The time spent traveling from home to the first client does not count as working time. However, after finishing her visit at 10:30 a.m., Maria travels to her next client. The time spent traveling between these clients is working time and must be paid.  

Waiting Time

Employers must count waiting time as working time when they require workers to remain at a specific location. However, waiting at home between assignments or shifts generally does not count as working time.  

• Example: Alex, a care worker, arrives at a client’s home but is asked to wait for 30 minutes before starting work due to the client being unavailable. Since Alex is required to be at the client’s location during this time, it counts as working time and must be paid. However, if Alex was waiting at home between two shifts, this time would not be paid. 

Unpaid Working Time

Employers sometimes fail to recognise unpaid working time, which can reduce wages, especially for those on the minimum wage. For instance, if additional time is added to a worker’s shift—before or after work hours—this time must be included in their pay calculation. Similarly, if a care worker attends a team meeting after hours, even if the employer provides food during the meeting, this still counts as working time and must be paid accordingly.

Breaks

Workers have the right to at least one uninterrupted 20-minute break if they work more than 6 hours a day.   

Employers must properly record and communicate breaks to avoid confusion. If a worker does not take their scheduled break, or if they are required to work through it, employers must count this as working time.  

Workers are legally entitled to rest breaks, and the frequency and duration of these breaks should be clearly outlined in their contract. Employers must ensure that workers take their breaks, as simply being entitled to a break isn’t enough—workers must actually have the opportunity to take it.  

• Example: A care worker, Emma, is entitled to a 30-minute break during her 8-hour shift. However, due to a busy schedule, Emma works through her break to complete necessary tasks. Because she didn’t take her break, those 30 minutes must be included in her paid working time. If the employer doesn’t compensate her for this time, they could be in breach of NMW regulations. 

Pay and Deductions 

Employers must ensure that deductions, such as for uniforms or accommodation, do not reduce a worker’s pay below the minimum wage. If deductions cause a worker’s earnings to drop below the NMW, it constitutes underpayment. Employers should also regularly review wages and inform workers when they can expect pay increases.  

• Example: Josh, a care worker, earns the NMW and is required to purchase a £60 uniform from his employer. His weekly wage is £400. After the deduction for the uniform, his earnings fall to £340 for that week. Since this brings his pay below the NMW for that pay period, the employer is in violation of wage regulations and must reimburse the difference. 

Employers must also be mindful of other deductions, such as for transport provided by the employer or meals. These deductions must not push a worker’s earnings below the legal minimum. 

Record-Keeping 

Accurate record-keeping is essential to avoid disputes and ensure compliance with wage laws. Employers are legally obligated to maintain thorough records of hours worked, wages paid, travel time, and any deductions made from pay. This includes contracts, timesheets, payslips, and records of payments made.  

Proper documentation provides an audit trail. This can protect both the employer and the worker in the event of a wage dispute. Employers must be able to show that all workers have been paid the correct amount.  This includes travel time and waiting periods. These can either be paper records or computerised and retained for at least 6 years.  

Employers must provide payslips. These should clearly show hours worked, wages earned, and any deductions. Relying solely on rotas or contracted hours could lead to underpayment, as they may not reflect all the time actually worked.

Pay Reference Period

The pay reference period is the period of time for which a worker is paid, whether weekly, monthly, or another time frame, but no longer than one calendar month. If workers are not paid for all hours worked within that period, it results in an underpayment.

Example: A worker paid monthly notices that they were not paid for a mandatory training session during the pay reference period. This failure to pay for the training counts as an underpayment, which must be rectified to avoid legal penalties.

  

By understanding these key details, both care workers and employers in the sector can protect themselves from common wage-related issues. Compliance with National Minimum Wage Regulations is a legal requirement. It also helps create a more supportive and productive working environment.

For more help and support on National Minimum Wage Regulations, you can contact ACAS for free and confidential support on 0300 123 1100 or check out the minimum wage calculator  

Need Help With Payroll Compliance

If you’re looking for expert support, Fresh Clarity offers a full payroll service specifically designed for the care sector. We can help ensure your payroll is compliant, accurate, and tailored to meet the unique needs of your business. Get in touch with us today to learn how we can take the stress out of managing your payroll.