Commentary

(e) Items that reduce minimum wage pay

Division BI Pay
| Commentary

(e) Items that reduce minimum wage pay

| Commentary

(e)     Items that reduce minimum wage pay

So far our survey of the calculation of national minimum wage pay has been concerned to distinguish between those payments and benefits that count as remuneration in the pay reference period and those that do not, applying the rules in NMWR SI 2015/621 Part 4 Chapter 1. It is now necessary to subtract from the calculation any 'reductions' determined in accordance with Part 4 Chapter 2 to give a final figure for national minimum wage pay.

The 2015 Regulations identify three categories of reduction: firstly, deductions or payments in respect of employment-related expenditure; secondly, deductions or payments for the employer's own use and benefit; and thirdly, deductions or payments in respect of living accommodation. Neither the NMWA 1998 nor the 2015 Regulations define what is meant by 'deductions' or 'payments', presumably because it was thought the matter was straightforward. That assumption has proved to be rather optimistic (see para [202.11]) and overall the provisions relating to reductions have caused considerable difficulty.

(i)     Work-related expenses

Under NMWR SI 2015/621 reg 13(1) deductions made by the employer (or payments made by or due from the worker) 'as respects the worker's expenditure in connection with his employment' reduce national minimum wage pay. So, for example, deductions from pay for safety equipment or for tools or uniform must be subtracted from national minimum wage pay, thereby

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