National Minimum Wage and National Living Wage - who must be paid it
Piece workers' and homeworkers' entitlement to the minimum wage
Piece workers are paid by the number of items they produce or tasks they perform rather than the number of hours they work. Often piece workers work at home or in factories.
Piece workers must be paid at least the National Minimum Wage or National Living Wage for every hour they work unless they are a rated output worker for minimum wage purposes. If they are rated output workers, they can be paid a 'fair' piece rate for each piece produced or task performed.
Homeworkers or workers who do not work on your premises
Homeworkers and other workers who do not work on your premises are entitled to the minimum wage unless they are running their own business and are genuinely self-employed. If the worker is working for another person or company on your behalf they are probably not self-employed and so are entitled to the minimum wage, even if they are told they are self-employed.
Many homeworkers are classed as output workers for minimum wage purposes and may be paid a 'fair' piece rate if all the conditions are met. If not they must be paid minimum wage for every hour worked. Homeworkers must receive at least the minimum wage, even if they pass some of the work to others, such as close friends or family.
You should not rely on a worker's tax status to determine whether they are a worker or self-employed for minimum wage purposes. A person who has been assessed as self-employed by HM Revenue & Customs for tax purposes will not necessarily be self-employed for the purposes of the minimum wage. If you are unsure you can call the Acas Helpline on Tel 0300 123 1100 for advice.
Acas Helpline0300 123 1100