NMWM08121 | Working time: salaried hours work: considering excess hours worked in the calculation year: weekly example

Relevant legislation

The legislation that applies to this page is as follows:

• National Minimum Wage Regulations 2015, regulations 26 to 28

Example of considering excess hours

When considering whether a worker has worked excess hours over and above their basic hours it is necessary to consider for each pay reference period the actual hours worked and treated as worked (NMWM08100).

A weekly paid worker has 2080 basic hours in the calculation year 6 January 2019 to 5 January 2020.

To identify the time treated as worked for each pay reference period divide the basic hours by 52:

• 2080 ÷ 52 = 40 hours

As long as the worker does not exceed the basic hours in the calculation year, the employer must pay at least National Minimum Wage for 40 hours per week regardless of the time the worker actually spends working.

For example;

• In week 1, the worker actually worked the hours, 9:00 to 5:30, Monday to Friday each weekday that week.

The time counted for excess hours purposes is 42.5 hours (5 days of 8.5 hours)

As the cumulative excess hours of 42.5 are less than the basic hours for the calculation year (2080) no excess hours calculation is required for this pay reference period. For National Minimum Wage purposes the worker must be paid at least National Minimum Wage for 40 hours.

• In week 2, the worker took two days off at the beginning of the week, then returned to work and worked several longer days to prepare for an important presentation. No payment was made for the additional 6 hours worked.

The time counted for excess hours purposes is: 46 hours;

• 3 days of 8 hours (24 hours),

• 2 days holiday at 8 hours per day (16 hours) and

• unpaid additional time (6 hours).

As the cumulative excess hours of 88.5 (42.5 + 46) are less than the basic hours for the calculation year (2080) no excess hours calculation is required for this pay reference period. For National Minimum Wage purposes the worker must be paid at least National Minimum Wage for 40 hours.

• In week 3, the worker continued to work one more longer day as well as being absent due to sickness for 2 days, only 1 of which was paid. On return to work the worker spent a total of 6 hours travelling to deliver a presentation. All the travelling took place outside normal working time. No payment was made for the additional time spent working the longer days, totalling 10 hours.

The time counted for excess hours purposes is: 56 hours;

• 3 days of 8 hours (24 hours),

• 2 days sickness absence at 8 hours per day (16 hours)

• unpaid additional time (10 hours), and

• hours travelling outside normal working time (6 hours).

As the cumulative excess hours of 144.5 (42.5 + 46 + 56) are less than the basic hours for the calculation year (2080) no excess hours calculation is required for this pay reference period. The unpaid absence is ignored for the purposes of considering the excess hours against the basic hours.

However, the hours treated as worked for National Minimum Wage purposes are reduced by the hours relating to the one day of unpaid absence (NMWM08070) so the hours for which the worker must be paid as least National Minimum Wage are 32 hours (40 less 8 hours unpaid absence).

• In week 4, the worker worked his standard contractual hours, 9:00 to 5:00 but the employer recognised that the worker had been working more hours than usual and gave 1 day time off in lieu. Time off in lieu is simply time not worked, see NMWM08550.

The time counted for excess hours purposes is 32 hours (4 days of 8 hours)

As the cumulative excess hours of 176.5 (42.5 + 46 + 56 + 32) are less than the basic hours for the calculation year (2080) no excess hours calculation is required for this pay reference period. For National Minimum Wage purposes the worker must be paid at least National Minimum Wage for 40 hours.

Only when the worker’s cumulative excess hours exceed the basic hours for the calculation year is it necessary to perform any additional calculation to take account of those excess hours (NMWM08130).