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HMRC internal manual

National Minimum Wage Manual

HM Revenue & Customs
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Status: Investigations for National Minimum Wage

HMRC undertakes status work for tax and national insurance purposes. Whilst there are some similarities to the approach required to investigate a person’s status for tax and national insurance and that required for minimum wage purposes it should be remembered that the definition of a worker is more wide ranging than that of an employee as used for tax and national insurance purposes. Consequently, a person considered not an employee but self employed for tax and national insurance purposes can still be a worker (NMWM05020) for minimum wage purposes.

(This content has been withheld because of exemptions in the Freedom of Information Act 2000)

When investigating whether a person is a worker or not for minimum wage purposes, NMW Officers need to examine the working arrangements and consider the contractual position. This is achieved by;

  1. obtaining copies of written contracts, job descriptions, terms and conditions, job adverts, recruitment documentation, and any other relevant documents, and
  2. interviewing the parties involved, including third parties, to learn what happens in practice. For example, if a third party training provider is operating an apprenticeship programme with an employer then a NMW Officer may interview both the employer and training provider - treating each party as a “relevant person” under the powers of officers (NMWM12210).

If a difference exists between the documentation and what actually occurs it is appropriate to consider whether the written contract has been amended or varied by what happens in practice.

Due to the nature of this type of investigation it is not possible to resolve status enquiries solely through correspondence, as this will deny the opportunity to clarify the meaning of the answers and ask supplementary questions.

Only in those cases where a NMW Officer is of the opinion that an employer/worker relationship exists will entitlement to national minimum wage arise.