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HMRC internal manual

National Minimum Wage Manual

HM Revenue & Customs
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Types of work: unmeasured work - demonstrating that the ascertained hours in a daily average agreement are realistic

Relevant legislation

The legislation that applies to this page is as follows:

For pay reference periods commencing

* on or after 6 April 2015; National Minimum Wage Regulations 2015, regulation 49
* before 6 April 2015; National Minimum Wage Regulations 1999, regulation 28

For a daily average agreement (NMWM07120) to be valid for unmeasured work it is necessary for the employer to be able to demonstrate that the ascertained hours represent a realistic average of the time the worker is expected to work.

Whilst there is no description in legislation as to what is or is not a realistic average for a daily average agreement, there is an onus on an employer to be able to demonstrate it is a reasonable average.

There is no requirement for the daily average agreement to specify:

  • particular days on which to carry out the work, or
  • the number of days in a particular pay reference period on which the unmeasured worker is available to carry out his duties, or
  • the full amount of time for which the unmeasured worker is to be available to carry out his duties as contemplated by the worker’s contract.

However, whilst these issues do not need to be specified in the agreement, it is necessary for an employer to identify such information in order to calculate the hours of unmeasured work to be performed under the agreement if the worker is only available for a part of the agreed time for working (NMWM07140).

A daily average agreement should not attempt to vary the worker’s contractual hours so that he works the set daily average and no more or less on any day. Whilst the parties could agree to such a contractual variation, the resulting arrangement will no longer satisfy the conditions of unmeasured work (NMWM07100) and time work (NMWM07040) is likely to be appropriate.