National Minimum Wage and National Living Wage - who must be paid it

National Minimum Wage and National Living Wage checklist

Guide

If all of the following apply the individual is a 'worker' who is entitled to the National Minimum Wage or National Living Wage:

  • There is a contract or other arrangement with you or your organisation, which entitles the individual to a reward. The contract does not have to be written: it may be implied (ie reflecting what happens in practice in the workplace) or oral (ie a spoken agreement of work in exchange for rewards).
  • The reward is a monetary payment (ie cash or other form of financial payment) or a benefit in kind and the reward is not simply the reimbursement of genuine out-of-pocket expenses. Whilst a reward would typically involve you or your organisation incurring a cost, the promise of a contract or future work could be considered a benefit in kind.
  • The individual has to turn up for work even if they don't want to. In deciding if someone had to turn up for work a tribunal would look at factors such as whether you can impose sanctions on the individual for failing to do work, your grievance and disciplinary procedures, and whether you or the individual are able to terminate the contract or arrangement by giving notice.
  • You have to provide work for the duration of the contract or arrangement (this would include individuals doing 'casual work' and using someone's labour on a 'zero hours' contract).
  • The individual has to perform the work or services personally and only has a limited right to send a substitute. Note, being able to delegate to another member of staff does not amount to substitution or subcontracting out the work for minimum wage purposes.
  • You are not the individual's client or customer.

Referring to someone as 'self-employed' or the fact that they are registered as self-employed for tax purposes does not necessarily make you their client or customer.

For further guidance on determining self-employed status, see self-employed people and the minimum wage.