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HMRC internal manual

National Minimum Wage Manual

From
HM Revenue & Customs
Updated
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Deductions and payments from workers: work related fees, registrations and licenses

 

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, regulations 12 & 13
* before 6 April 2015; National Minimum Wage Regulations 1999, regulations 31 to 34

Some employments need workers to be registered or licensed before they can legally perform their work.

The normal considerations for payments (NMWM11020) and deductions (NMWM11030) apply.

It is particularly important to establish:

  1. How the charge arises? Is the requirement a pre-requisite placed on a person to put them in a position to take up employment in a particular type of work or is it imposed by an employer to enable them to perform the duties of the employment?
  2. Who is responsible for meeting the charge? Are the costs of these registrations and licence applications the personal liability of the worker or the liability of the employer?

Deciding how a charge arises

A charge for something, such as a qualification, which is required as a pre-requisite for obtaining employment does not reduce national minimum wage pay.

However, if the requirement is imposed by the employer and arises from the employment itself then any charge passed on to the worker would be considered an expense (NMWM11100), and would reduce national minimum wage pay.

Example 1: Some nurses have to register with the Nursing and Midwifery Council before they can work as a nurse in the NHS or private health care sector. There is a fee for registration. Payment of the fee is the liability of the individual. Registration is a pre-requisite for securing employment. Therefore payment of the fee does not reduce national minimum wage pay.

Example 2: An employer in the meat preparation industry has a legal responsibility to take steps to ensure his workers do not carry specific diseases, such as Tuberculosis. In order to prove this the employer insists that all staff produce a medical certificate. The cost of this medical check and certificate is incurred in the course of the employment and is an expense. Any deduction or payment to the employer in respect of this amount will reduce the worker’s national minimum wage pay.

Deciding who is responsible for a charge

It might not be straightforward to establish who is liable for a charge, since it might be the employer’s responsibility to verify that the relevant employment checks or registrations have been carried out.

Where the worker is responsible for the charge, any deduction made from pay or payment made by the worker to the employer which is then passed on to a third party will not reduce national minimum wage pay.

Example 3: Criminal Records Bureau (CRB) checks see NMWM11090. An individual is personally liable to pay for a CRB check. If the employer deducts an amount in respect of the charge from the worker’s pay (or requires them to pay the amount) the amount will not reduce national minimum wage pay.

Further examples of worker related fees:

Workers Registration Scheme - the fee is the responsibility of the individual worker. If the employer pays the fee and then deducts the amount from the worker’s pay, the amount will not reduce national minimum wage pay. If the worker makes a payment to the employer to cover the fee on the worker’s behalf, the amount will not reduce national minimum wage pay.

Security Industry Authority - Specific workers must by law hold a licence. It is the worker’s responsibility to ensure he obtains the licence, and his responsibility to pay the fee. If the employer pays the fee and then seeks repayment from the worker, national minimum wage pay will not be reduced (regardless of whether the charge is made by either a payment or a deduction).

Administration charges

Where the employer imposes a handling or administration fee in connection with a license or registration, any deduction or payment in respect of that charge the charge must be considered under the normal rules (NMWM11050).

Charges for payslips

Where an employer makes a charge for payslips, the effect on national minimum wage pay will depend on whether the individual is working under a contract of employment.

If a contract of employment is in place, the employer is legally obliged to issue a payslip. Any charge made for the payslip will reduce national minimum wage pay since it is in connection with the employment (NMWM11100)

If there is no contract of employment, the employer is not required to issue a payslip, so any charge must be considered under the normal rules for deductions (NMWM11020) or payments (NMWM11030).