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HMRC internal manual

National Minimum Wage Manual

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HM Revenue & Customs
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Working time: salaried hours work; considering adjustments for absences

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 23
* before 6 April 2015; National Minimum Wage Regulations 1999, regulation 21(3)

General

For a worker performing salaried hours work, absences from work are included within the basic hours where the worker is contractually entitled to receive their normal salary. Common absences treated in such fashion include holidays, sickness, jury service and maternity and paternity leave.

Absence with normal pay

Where such absences occur, there is no adjustment required to the hours to be treated as worked in the respective pay reference period as long as the worker is paid their normal salary. 

For example, absence counted as part of the time treated as work

  • A monthly paid worker performing salaried hours work has a calculation year of 2080 basic hours. The contract provides full pay for any sickness absence up to 3 months.
  • The time treated as worked for each pay reference period is 173.33 hours (NMWM08035).

In June, the worker was absent from work for a complete week due to illness. As the contract entitled the worker to be paid their full salary for the absence, the time treated as worked for that month remained at 173.33 hours.

Absence with no or reduced pay

Where a worker is absent and the worker is entitled to no, or reduced pay, an adjustment is required to the hours to be treated as worked in the respective pay reference period; the hours treated as worked are reduced by the number of hours absent.

For example, the time treated as worked reduced by absence

  • A monthly paid worker performing salaried hours work has a calculation year of 2080 basic hours. The contract provides no pay for the first 3 days of any sickness absence and then full pay for up to 6 months.
  • The time treated as worked for each pay reference period is 173.33 hours (NMWM08035).

In June, the worker was absent from work for four days, Monday to Thursday, due to illness. The employer paid the salary according to the contract, less 3 days for sickness absence calculated as 24 hours pay (3 days of 8 hours).

The time treated as worked for that month is 149.33 hours (173.33 hours less 24 hours unpaid sick absence).

Please note that whilst absences can affect the hours treated as worked in a pay reference period they do not reduce the number of basic hours in a calculation year nor whether excess hours (NMWM08110) have been worked. The only absence which will reduce the total number of basic hours for consideration of excess hours is an absence in connection with industrial action (NMWM08230).