NMWM08042 - Working time: salaried hours work: transitional provision
Relevant legislation
The legislation that applies to this page is as follows:
- National Minimum Wage Regulations 2015, regulations 21(2), 24, 24(5) to (8)
- National Minimum Wage (Amendment) (No. 2) Regulations 2020
The National Minimum Wage (Amendment) (No. 2) Regulations 2020 introduced changes to the rules around salaried hours work from 6 April 2020.
The amendment regulations included transitional arrangements describing special rules for those workers engaged by an employer prior to 6 April 2020.
A worker employed prior to 6 April 2020 who previously would not have been classified as performing salaried hours work but does so as a result of the National Minimum Wage (Amendment) (No. 2) Regulations 2020 is identified as a “re-categorised worker”.
Where an employer has a “re-categorised worker” they can nominate in writing a different day on which a workers starts performing salaried hours work and commences their calculation year. However, this is governed by the following:
- The nominated day must not be after 6 April 2022,
- The worker’s calculation year (NMWM08040) begins on the nominated day. Subsequent years begin on the anniversary of that day,
- Unless an alternative calculation year takes effect (NMWM08040).
Where this change represents a variation in the worker’s contract, it is appropriate to ensure the worker is paid at least National Minimum Wage in pay reference periods prior to the change.
If an employer does not select a “nominated day” for a “re-categorised worker” before 6 April 2022, then the starting date for the worker to be performing salaried hours work will be the first day of the calculation year which falls after 6 April 2022.
Example 1: A worker performing unmeasured work commenced employment on 1 September 2018. However, the amendments now mean that they meet the conditions for performing salaried hours work from 6 April 2020 and is classified as a “re-categorised worker”.
Unless the employer provides written evidence of a nominated day, the above amendments will apply from 6 April 2022. Their first calculation year will run from 1 September 2022 to 31 August 2023.
If the employer provides written notice nominating the day on which the amendments shall apply, then the worker is deemed to be performing salaried hours work from that day and their calculation year will be from this day e.g. nominated day 1 August, so calculation year is 1 August to 31 July.
Example 2: A worker commences employment on or after 6 April 2020 and meets the conditions for performing salaried hours work. They are not a “re-categorised worker” and will be considered as performing salaried hours work from that day they start employment. The worker’s calculation year will be determined by the date they started (see NMWM08040).