National Minimum Wage Act 1998

Entitlement to the national minimum wage

Workers to be paid at least the national minimum wage

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• (1) A person who qualifies for the national minimum wage shall be remunerated by his employer in respect of his work in any pay reference period at a rate which is not less than the national minimum wage.

• (2) A person qualifies for the national minimum wage if he is an individual who—

• (a) is a worker;

• (b) is working, or ordinarily works, in the United Kingdom under his contract; and

• (c) has ceased to be of compulsory school age.

• (3) The national minimum wage shall be such single hourly rate as the Secretary of State may from time to time prescribe.

• (4) For the purposes of this Act a “pay reference period” is such period as the Secretary of State may prescribe for the purpose.

• (5) Subsections (1) to (4) above are subject to the following provisions of this Act.

Regulations relating to the national minimum wage

Determination of hourly rate of remuneration

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• (1) The Secretary of State may by regulations make provision for determining what is the hourly rate at which a person is to be regarded for the purposes of this Act as remunerated by his employer in respect of his work in any pay reference period.

• (2) The regulations may make provision for determining the hourly rate in cases where—

• (a) the remuneration, to the extent that it is at a periodic rate, is at a single rate;

• (b) the remuneration is, in whole or in part, at different rates applicable at different times or in different circumstances;

• (c) the remuneration is, in whole or in part, otherwise than at a periodic rate or rates;

• (d) the remuneration consists, in whole or in part, of benefits in kind.

• (3) The regulations may make provision with respect to—

• (a) circumstances in which, times at which, or the time for which, a person is to be treated as, or as not, working, and the extent to which a person is to be so treated;

• (b) the treatment of periods of paid or unpaid absence from, or lack of, work and of remuneration in respect of such periods.

• (4) The provision that may be made by virtue of paragraph (a) of subsection (3) above includes provision for or in connection with—

• (a) treating a person as, or as not, working for a maximum or minimum time, or for a proportion of the time, in any period;

• (b) determining any matter to which that paragraph relates by reference to the terms of an agreement.

• (5) The regulations may make provision with respect to—

• (a) what is to be treated as, or as not, forming part of a person’s remuneration, and the extent to which it is to be so treated;

• (b) the valuation of benefits in kind;

• (c) the treatment of deductions from earnings;

• (d) the treatment of any charges or expenses which a person is required to bear.

• (6) The regulations may make provision with respect to—

• (a) the attribution to a period, or the apportionment between two or more periods, of the whole or any part of any remuneration or work, whether or not the remuneration is received or the work is done within the period or periods in question;

• (b) the aggregation of the whole or any part of the remuneration for different periods;

• (c) the time at which remuneration is to be treated as received or accruing.

• (7) Subsections (2) to (6) above are without prejudice to the generality of subsection (1) above.

• (8) No provision shall be made under this section which treats the same circumstances differently in relation to—

• (a) different areas;

• (b) different sectors of employment;

• (c) undertakings of different sizes;

• (d) persons of different ages; or

• (e) persons of different occupations.

Exclusion of, and modifications for, certain classes of person

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• (1) This section applies to persons who have not attained the age of 26.

• (1A) This section also applies to persons who have attained the age of 26 who are–

• (a) within the first six months after the commencement of their employment with an employer by whom they have not previously been employed;

• (b) participating in a scheme under which shelter is provided in return for work;

• (c) participating in a scheme designed to provide training, work experience or temporary work;

• (d) participating in a scheme to assist in the seeking or obtaining of work; ...

• (e) undertaking a course of higher education requiring attendance for a period of work experience. or

• (f) undertaking a course of further education requiring attendance for a period of work experience.

• (2) The Secretary of State may by regulations make provision in relation to any of the persons to whom this section applies—

• (a) preventing them being persons who qualify for the national minimum wage; or

• (b) prescribing an hourly rate for the national minimum wage other than the single hourly rate for the time being prescribed under section 1(3) above.

• (3) No provision shall be made under subsection (2) above which treats persons differently in relation to—

• (a) different areas;

• (b) different sectors of employment;

• (c) undertakings of different sizes; or

• (d) different occupations.

• (4) If any description of persons who have attained the age of 26 is added by regulations under section 4 below to the descriptions of person to whom this section applies, no provision shall be made under subsection (2) above which treats persons of that description differently in relation to different ages over 26.

Power to add to the persons to whom section 3 applies

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• (1) The Secretary of State may by regulations amend section 3 above by adding descriptions of persons who have attained the age of 26 to the descriptions of person to whom that section applies.

• (2) No amendment shall be made under subsection (1) above which treats persons differently in relation to—

• (a) different areas;

• (b) different sectors of employment;

• (c) undertakings of different sizes;

• (d) different ages over 26; or

• (e) different occupations.

The Low Pay Commission

The first regulations: referral to the Low Pay Commission

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• (1) Before making the first regulations under section 1(3) or (4) or 2 above, the Secretary of State shall refer the matters specified in subsection (2) below to the Low Pay Commission for their consideration.

• (2) Those matters are—

• (a) what single hourly rate should be prescribed under section 1(3) above as the national minimum wage;

• (b) what period or periods should be prescribed under section 1(4) above;

• (c) what method or methods should be used for determining under section 2 above the hourly rate at which a person is to be regarded as remunerated for the purposes of this Act;

• (d) whether any, and if so what, provision should be made under section 3 above; and

• (e) whether any, and if so what, descriptions of person should be added to the descriptions of person to whom section 3 above applies and what provision should be made under that section in relation to persons of those descriptions.

• (3) Where matters are referred to the Low Pay Commission under subsection (1) above, the Commission shall, after considering those matters, make a report to the Prime Minister and the Secretary of State which shall contain the Commission’s recommendations about each of those matters.

• (4) If, following the report of the Low Pay Commission under subsection (3) above, the Secretary of State decides—

• (a) not to make any regulations implementing the Commission’s recommendations, or

• (b) to make regulations implementing only some of the Commission’s recommendations, or

• (c) to prescribe under section 1(3) above a single hourly rate which is different from the rate recommended by the Commission, or

• (d) to make regulations which in some other respect differ from the recommendations of the Commission, or

• (e) to make regulations which do not relate to a recommendation of the Commission,

the Secretary of State shall lay a report before each House of Parliament containing a statement of the reasons for the decision.

• (5) If the Low Pay Commission fail to make their report under subsection (3) above within the time allowed for doing so under section 7 below, any power of the Secretary of State to make regulations under this Act shall be exercisable as if subsection (1) above had not been enacted.

Referral of matters to the Low Pay Commission at any time

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• (1) The Secretary of State may at any time refer to the Low Pay Commission such matters relating to this Act as the Secretary of State thinks fit.

• (2) Where matters are referred to the Low Pay Commission under subsection (1) above, the Commission shall, after considering those matters, make a report to the Prime Minister and the Secretary of State which shall contain the Commission’s recommendations about each of those matters.

• (3) If on a referral under this section—

• (a) the Secretary of State seeks the opinion of the Low Pay Commission on a matter falling within section 5(2) above,

• (b) the Commission’s report under subsection (2) above contains recommendations in relation to that matter, and

• (c) implementation of any of those recommendations involves the exercise of any power to make regulations under sections 1 to 4 above,

subsection (4) of section 5 above shall apply in relation to the report, so far as relating to the recommendations falling within paragraph (c) above, as it applies in relation to a report under subsection (3) of that section.

• (4) If on a referral under this section—

• (a) the Secretary of State seeks the opinion of the Low Pay Commission on any matter falling within section 5(2) above, but

• (b) the Commission fail to make their report under subsection (2) above within the time allowed under section 7 below,

the Secretary of State may make regulations under sections 1 to 4 above as if the opinion of the Commission had not been sought in relation to that matter.

Referrals to, and reports of, the Low Pay Commission: supplementary

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• (1) This section applies where matters are referred to the Low Pay Commission under section 5 or 6 above.

• (2) The Secretary of State may by notice require the Low Pay Commission to make their report within such time as may be specified in the notice.

• (3) The time allowed to the Low Pay Commission for making their report may from time to time be extended by further notice given to them by the Secretary of State.

• (4) Before arriving at the recommendations to be included in their report, the Low Pay Commission shall consult—

• (a) such organisations representative of employers as they think fit;

• (b) such organisations representative of workers as they think fit; and

• (c) if they think fit, any other body or person.

• (5) In considering what recommendations to include in their report, the Low Pay Commission—

• (a) shall have regard to the effect of this Act on the economy of the United Kingdom as a whole and on competitiveness; and

• (b) shall take into account any additional factors which the Secretary of State specifies in referring the matters to them.

• (6) The report of the Low Pay Commission must—

• (a) identify the members of the Commission making the report;

• (b) explain the procedures adopted in respect of consultation, the taking of evidence and the receiving of representations;

• (c) set out the reasons for their recommendations; and

• (d) if the Secretary of State has specified any additional factor to be taken into account under subsection (5)(b) above, state that they have taken that factor into account in making their recommendations.

• (7) The Secretary of State shall—

• (a) lay a copy of any report of the Low Pay Commission before each House of Parliament; and

• (b) arrange for the report to be published.

• (8) In this section—

• “recommendations” means the recommendations required to be contained in a report under section 5(3) or 6(2) above, as the case may be;

• “report” means the report which the Low Pay Commission are required to make under section 5(3) or 6(2) above, as the case may be, on the matters referred to them as mentioned in subsection (1) above.

The Low Pay Commission

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• (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (9) The Secretary of State may at any time appoint a body, to be known as “the Low Pay Commission”, to discharge the functions conferred or imposed on the Low Pay Commission under this Act.

• (10) Schedule 1 to this Act shall have effect with respect to the constitution and proceedings of the body appointed under subsection (9) above.

• (11) Where the Secretary of State exercises the power conferred by subsection (9) above, the body which is to be regarded for the purposes of this Act as being the Low Pay Commission as respects the referral of any matter to the Low Pay Commission by the Secretary of State after the exercise of the power is the body appointed under that subsection.

• (12) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (13) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (14) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Records

Duty of employers to keep records

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For the purposes of this Act, the Secretary of State may by regulations make provision requiring employers—

• (a) to keep, in such form and manner as may be prescribed, such records as may be prescribed; and

• (b) to preserve those records for such period as may be prescribed.

Worker’s right of access to records

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• (1) A worker may, in accordance with the following provisions of this section,—

• (a) require his employer to produce any relevant records; and

• (b) inspect and examine those records and copy any part of them.

• (2) The rights conferred by subsection (1) above are exercisable only if the worker believes on reasonable grounds that he is or may be being, or has or may have been, remunerated for any pay reference period by his employer at a rate which is less than the national minimum wage.

• (3) The rights conferred by subsection (1) above are exercisable only for the purpose of establishing whether or not the worker is being, or has been, remunerated for any pay reference period by his employer at a rate which is less than the national minimum wage.

• (4) The rights conferred by subsection (1) above are exercisable—

• (a) by the worker alone; or

• (b) by the worker accompanied by such other person as the worker may think fit.

• (5) The rights conferred by subsection (1) above are exercisable only if the worker gives notice (a “production notice”) to his employer requesting the production of any relevant records relating to such period as may be described in the notice.

• (6) If the worker intends to exercise the right conferred by subsection (4)(b) above, the production notice must contain a statement of that intention.

• (7) Where a production notice is given, the employer shall give the worker reasonable notice of the place and time at which the relevant records will be produced.

• (8) The place at which the relevant records are produced must be—

• (a) the worker’s place of work; or

• (b) any other place at which it is reasonable, in all the circumstances, for the worker to attend to inspect the relevant records; or

• (c) such other place as may be agreed between the worker and the employer.

• (9) The relevant records must be produced—

• (a) before the end of the period of fourteen days following the date of receipt of the production notice; or

• (b) at such later time as may be agreed during that period between the worker and the employer.

• (10) In this section—

• “records” means records which the worker’s employer is required to keep and, at the time of receipt of the production notice, preserve in accordance with section 9 above;

• “relevant records” means such parts of, or such extracts from, any records as are relevant to establishing whether or not the worker has, for any pay reference period to which the records relate, been remunerated by the employer at a rate which is at least equal to the national minimum wage.

Failure of employer to allow access to records

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• (1) A complaint may be presented to an employment tribunal by a worker on the ground that the employer—

• (a) failed to produce some or all of the relevant records in accordance with subsections (8) and (9) of section 10 above; or

• (b) failed to allow the worker to exercise some or all of the rights conferred by subsection (1)(b) or (4)(b) of that section.

• (2) Where an employment tribunal finds a complaint under this section well-founded, the tribunal shall—

• (a) make a declaration to that effect; and

• (b) make an award that the employer pay to the worker a sum equal to 80 times the hourly amount of the national minimum wage (as in force when the award is made).