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HMRC internal manual

National Minimum Wage Manual

From
HM Revenue & Customs
Updated
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Working time: unmeasured work; ascertaining hours worked using daily average agreement

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 50
* before 6 April 2015; National Minimum Wage Regulations 1999, regulation 29

General

A daily average agreement (NMWM07120) is a written agreement between the employer and worker which sets out the average number of hours that a worker is likely to spend each day doing the required work provided they are available to work for the full time covered by the agreement.

For a worker performing unmeasured work with a daily average agreement, the time treated as worked in a pay reference period is ascertained by reference to the agreement. For example;

  • where the worker is available for the full time stated in the agreement, the time treated as worked is as described in the agreement;
  • where the worker is not available for the full time stated in the agreement, the time treated as worked is a proportion of the time described in the agreement.

For a daily average agreement to apply the employer must ensure that the agreement is valid (NMWM07130).

Example 1; determining hours to be treated as worked for full day covered by daily average agreement

A worker is required to provide live-in care to a customer on a shift basis. The employer and worker enter into a daily average agreement for work to be performed on average 6 hours of a shift of 8 hours duration.

As long as the worker is available for the full 8 hours of the shift, the time treated as worked for national minimum wage purposes will be 6 hours each day, irrespective of whether more or less hours are actually worked.

Example 2; determining hours to be treated as worked for partial day covered by daily average agreement

The worker in Example 1 is only available to work for 6 hours of the 8 hour shift. The 6 hours is only a proportion (75%) of the time stated in the agreement, so the time treated as worked for national minimum wage purposes is 4.5 hours (75% of 6 hours), irrespective of whether more or less hours are actually worked.

Any hours worked or treated as worked which do not form part of a daily average agreement are added to the average time stated in the agreement.

Example 3; considering hours work not covered by daily average agreement

The worker in Example 1 is required to work an additional 2 hours at the end of one shift to cover for a late colleague. The time treated as worked for national minimum wage purposes is 8 hours (6 hours from the daily average agreement plus the 2 additional hours not covered by the agreement).