NMWM08122 | Working time: salaried hours work: considering excess hours worked in the calculation year: two-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 worker paid every two weeks has 2080 basic hours in the calculation year 4 January to 3 January.

To identify the time treated as worked for each pay reference period divide the basic hours by 26:

• 2080 ÷ 26 = 80 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 80 hours per month regardless of the time the worker actually spends working.

For example;

• In the first two-week period, the worker actually worked the hours, 9:00 to 5:30, Monday to Friday each weekday of those weeks.

The time counted for excess hours purposes is 85 hours (10 days of 8.5 hours)

As the cumulative excess hours of 85 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 80 hours.

• In the next two weeks, the worker was absent for 3 days due to sickness, 1 of which was unpaid, and upon returning to work, worked several longer days to prepare for a meeting. No payment was made for the additional 8 hours worked.

The time counted for excess hours purposes is: 88 hours;

• 7 days of 8 hours (56 hours),

• 3 days sick absence at 8 hours per day (24 hours) and

• unpaid additional time (8 hours).

As the cumulative excess hours of 173 (85 + 88) 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 80 hours.

The hours treated as worked for National Minimum Wage purposes are reduced by the hours relating to the unpaid absence (NMWM08070) so the hours for which the worker must be paid at least National Minimum Wage are 72 hours (80 less 8 hours unpaid absence).

• In the third two-week period, the worker continued to work one more longer day as well as take 1 day holiday. On return to work the worker spent a total of 4 hours travelling to and from an important meeting. All the travelling took place outside normal working time. No payment was made for the additional time spent working the longer days, totalling 5 hours.

The time counted for excess hours purposes is: 89 hours;

• 9 days of 8 hours (72 hours),

• 1 day holiday at 8 hours per day (8 hours)

• unpaid additional time (5 hours), and

• hours travelling outside normal working time (4 hours).

As the cumulative excess hours of 262 (85 + 88 + 89) are less than the basic hours for the calculation year (2080) no excess hours calculation is required for this pay reference period. The unpaid time is ignored for the purposes of considering the excess hours against the basic hours.

• In the fourth two-week period, the worker worked his standard hours, 9:00 to 5:00 but the employer recognised that the worker had been working more hours than usual and gave 3 days time off in lieu. Time off in lieu is simply time not worked, see NMWM08550.

The time counted for excess hours purposes is 56 hours (7 days of 8 hours)

As the cumulative excess hours of 318 (85 + 88 + 89 + 56) 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 80 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).