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HMRC internal manual

National Minimum Wage Manual

HM Revenue & Customs
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Types of work: confirming output work

For a worker to be performing output work the employer must ensure that the worker is paid according to the rated output work system and that:

  • The arrangements relating to the pieces of work in question do not attempt to set any normal, minimum or maximum working hours.
  • The employer does not control or set the hours worked by the worker in relation to the piece/task to be processed.
  • The employer has determined the mean hourly output rate (NMWM03150) in relation to the piece/task to be processed.
  • The employer has given the worker a written notice before the start of the worker’s pay reference period. There is no need for a new notice before every pay reference period unless the terms of the notice change. The notice must contain all of the following elements:
  1. An explanation that it is being given to inform the worker that, for the purposes for compliance with the minimum wage legislation, the worker will be treated as working for a certain period of time;
  2. For the purposes of determining that period of time the employer has conducted a test or, where applicable, made an estimate of the average speed at which his workers produce the piece or perform the task;
  3. State what the mean hourly output rate (NMWM03150) is for the piece or task
  4. State the rate to be paid to the worker for the production of one piece or performance of one task; and
  5. Give the telephone number of the national minimum wage helpline (the Pay & Work Rights helpline) and identify it as the number of the national minimum wage helpline.

Where a worker does/makes a number of different things for the same employer - one notice can be issued but it must specify the rate for each different type of piece or different task.

If a worker is not provided with a suitably written notice then the person cannot be treated as an output worker and must be paid for each hour they work.