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National Minimum Wage (Amendment) (No 2) Regulations 2020

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Two sets of amendments to the National Minimum Wage (“NMW”) come into force on 6th April 2020. The first simply uprates the NMW in line with the Low Pay Commissions Recommendations.

The second, the National Minimum Wage (Amendment) (No 2) Regulations 2020, makes a number of (mostly) technical amendments to the NMW. The more important changes are:

Removal of “salary premiums” such as a London weighting, unsociable hours pay or bank holiday pay from the calculation of basic hours or annual salary pay. The full list is in regulation 5; and,

Permitting employers, by written notice, to change a calculation year for salaried workers in specified circumstances.

There are some fairly complex transitional provisions for these changes which will need careful scrutiny. The basic starting point is however that if a person was already a salaried worker before these amendments, and remains one afterwards, they come into force on 6th April 2020. Time, output and unmeasured hours workers will need a closer look in individual circumstances.

There is also a change introducing a requirement that an employer make, or intend to make, a separate payment to cover goods and services that a worker is obliged to purchase from the employer in order to avoid it being a reduction to basic pay. This takes effect for the first pay reference period after 6th April 2020.

Thanks to Matthew Jackson of Albion Chambers for preparing this case summary.