National Minimum Wage and National Living Wage - record keeping
You are legally required to keep sufficient records to show you are meeting National Minimum Wage and National Living Wage requirements.
For many employers there will be no need to maintain separate records - existing payroll and business records will be sufficient. For example, the payroll records you keep for PAYE (Pay As You Earn) and National Insurance contributions may be enough to show you are paying at least the national minimum wage to your workers.
Your records will be used in the event of a dispute - it is your responsibility to prove you are meeting minimum wage requirements. It is a criminal offence if you fail to keep sufficient records.
This guide explains your record keeping requirements and the rights of access to these records that your workers and HM Revenue & Customs compliance officers have.
Compliance officers' access to minimum wage records
Officers of HM Revenue & Customs (HMRC) enforce the National Minimum Wage and National Living Wage. They can ask to see your minimum wage records to check whether you are paying the minimum wage.
HMRC can also remove national minimum wage records from your premises in order to copy them, but must return them within a reasonable period.
When required, you must explain your minimum wage records to HMRC Officers, answer questions about them and provide any further information necessary to determine if minimum wage has been paid. HMRC Officers have the power to enter any premises used to carry out an employer's business, or which the employer uses in connection with his business, including the premises of businesses which place and employ agency workers.
You may be subject to criminal prosecution if you:
- refuse or wilfully neglect to pay a worker at a rate at least equal to the national minimum wage for any pay reference period
- fail to keep or preserve records
- make, or knowingly cause or allow a false entry to be made in minimum wage records
- produce, or knowingly cause or allow false records or information to be produced
- refuse or prevent an enforcement officer from seeing these minimum wage records
- refuse or neglect to answer any questions, give information or produce any documents to an enforcement officer when required to do so
You will also be vulnerable in any civil dispute about whether the minimum wage has been paid, since the burden of proving this rests on you.
Keeping and storing minimum wage records
National Minimum Wage and National Living Wage records do not have to be kept in any particular form. They can be kept on paper or on computer, for example. But you must be able to produce the records for an individual pay reference period for an individual worker in a single document on request. For more information see National Minimum Wage and Living Wage pay reference period.
You also have legal duties under the Data Protection Act around how you keep staff records and what you do with them. For more information on record-keeping, see staff records.
How long do minimum wage records need to be kept?
You must keep records for a minimum of three years after the end of the pay reference period following the one that the records cover.
For example, if a person is paid each calendar month, their records for the month of May 2015 would have to be kept until the beginning of July 2018. It is a criminal offence not to keep records for the required period.
Minimum wage records you must keep
By law, you are required to keep sufficient records to show that you are paying your workers at least the National Minimum Wage or National Living Wage. There is no definition of what counts as 'sufficient' records. The situation will vary from employer to employer and from worker to worker. It is left to your own judgment for each worker.
Generally, if you are keeping full payroll records this should be sufficient for minimum wage purposes. It is for you to judge when, for any particular worker, you should keep more detailed or specific records to show you are paying at least the minimum wage.
If a worker brings a claim for unpaid minimum wage to a tribunal or court, the burden will be on the employer to prove that the minimum wage has been paid. You will need to have records to enable you to provide this proof.
Minimum wage records: which details should I keep?
The records you should consider keeping include records which show:
- total pay paid to workers
- the hours they have worked
- overtime, shifts or other circumstances when there are increased rates of pay
- details of any allowances paid to the workers
- any deduction or payment for living accommodation provided by the employer to the workers
- amounts representing tips, service charges, gratuities or cover charges paid to the worker - when paid through the payroll these only counted towards NMW pay up to 1 October 2009
- any absences - for example - rest breaks, sick leave, holidays
- any travel or training undertaken by the workers during work hours
- bank statements or other commercial documentation
- contracts and agreements between you and your workers
- workers' dates of birth
- payments and deductions for expenditure incurred by the worker in connection with the employment
- payments for travelling to a temporary workplace (and any associated subsistence and accommodation) which are allowed as deductions from earnings under section 338 of the Income Tax (Earnings and Pensions) Act 2003
- documents to show why a worker is exempt from the minimum wage
The above is not intended to be a definitive or comprehensive list. The details of records to be kept may differ from case to case and also according to the type of work being done.
If you have a 'daily average' agreement with a worker, you must also keep a copy of that agreement. For more information, see what is unmeasured work for minimum wage purposes?
If you are employing rated output workers and paying fair piece rates, you must keep a copy of the written notices served on your workers and a copy of the data showing how you arrived at the 'mean hourly output rate' for all relevant pieces/tasks. For more information, see what is output work for minimum wage purposes?
If you are unsure whether you are keeping sufficient records of minimum wage payments, you should contact the Acas Helpline on Tel 0300 123 1100.
Workers' access to minimum wage records
If a worker has reasonable grounds to believe that they have not been paid the minimum wage, they have the right to see your records relating to them.
To do so, they must make a written request to you. You must produce the records within 14 days of receiving the request - or within a time period you agree with the worker.
A worker may inspect and examine the records and copy any part of them, and when doing so may be accompanied by someone else. If they wish to be accompanied they must have told you in their written request. The records must be produced at the place of work, or at a place the worker can reasonably attend or is mutually agreed.
If you refuse to let the worker see the records or fail to produce the records the worker can take a complaint to an industrial tribunal.
See further guidance on dealing with subject access requests as part of General Data Protection Regulation (GDPR).