This is important, because the NMW is not a right to be paid at least the NMW rate for each and every hour you work. Instead, it is a right to be paid at least an average of the NMW rate, once all the hours worked during a pay reference period and all the pay received in relation to that period is taken into account. This means that you can be paid below the NMW rate for some hours, but still be paid above the NMW when you look at the whole pay reference period. It also means that you may be paid below the NMW in one pay reference period, but above it in another — depending on exactly what hours you work and how you are paid.

For example, an employee who worked 160 hours in December at a rate of £7.50 an hour, but also received a Christmas bonus of £100 would have been paid an average rate of £8.13. Therefore, in December, they were paid more than the NMW. But, if they worked the same hours for the same pay in January, they would have been paid an average rate of £.750 an hour; below the NMW rate.

Similarly, an employee who is paid £8.50 an hour, but regularly works unpaid overtime, cannot claim an extra £7.83 for each hour of overtime worked. But, depending on how much unpaid overtime they did in a particular pay reference period, it might have dragged their average rate of pay below the NMW rate — meaning they were entitled to be paid more.

This is also an area of law that has changed recently, following a decision by the Court of Appeal in a case called Mencap v Tomlinson-Blake. That decision may be challenged in the Supreme Court, which might change the law again. If you do a significant amount of on call work you may want to seek further legal advice.

But, in general, any time that you actually working, for example, because you have been called or woken to deal with a work situation or task, will count as time worked for these purposes.

However, time at the work place, but not physically performing tasks or even asleep, may also count if your availability or presence amounts to you carrying out your duties. For example, a nurse who sleeps in the next room to an elderly and very vulnerable patient, in order to be immediately available if they awake confused, is probably working throughout that night. A pub landlord who is provided with a room over the pub is not working through the night (unless there are exceptional and highly unusual circumstances).

It is very common, for example, to be paid immediately after a pay reference period ends, i.e. in the next pay reference period. Such payments may well count towards the earlier pay reference period, even though they are received in a later one. At the same time, if pay is delayed too long, it will no longer count in relation to the pay reference period during which the work was done, although it will count towards the pay reference period during which is was received.

We need to know:

• How much you were paid between P1 for work you did during that same period
• How much you were paid between P2 that related to work you did between P1
• How much you were paid between P1 which either
  • doesn’t relate to any particular hours of work at all, or
  • relates to work done before P3

Show simple example


Adam is paid £1,500 gross every month, on the last calendar date in the month. He is looking at the pay reference period 1st January to 31st January 2018.

He received £1,500 on 31st January, which was in relation to the work he did the same month. He did not receive any other money during that pay reference period and the money he received in the next pay reference period (1st February to 28th February) wasn’t related to his work during 1st January to 31st January. Therefore, he was paid £1,500 in relation to the pay reference period 1st January to 31st January 2018.

Bill is also paid £1,500 gross every month, but he is paid on the first calendar date of the next month. He is also looking at the pay reference period 1st January to 31st January 2018.

Bill was paid £1,500 gross on the 1st January. But this was in relation to the work he did in December 2017, so it is not counted here. He was then paid £1,500 on the 1st February, which did relate to his work in January, so it is counted here. Therefore, he was also paid £1,500 in relation to the pay reference period 1st January to 31st January 2018.

Show more complicated example

Caroline should be paid £500 every week on Friday. She also gets a bonus of £50 if she hits her performance targets. This is paid a week in arrears. She is looking at the third week in January 2018 (13th to the 19th January).

Caroline was paid £500 on Friday 19th. Since this related to the work done in the same week, this is include in the pay for this pay reference period. She was also paid £50 on Friday the 19th, in relation to her good performance during the week before. This is not counted, because it relates to the pay reference period immediately before this one and will form part of that period’s pay. However, Caroline also performed well in this week and so received another payment of £50 on Friday 26th January. This will count towards the pay for the relevant pay period.

Finally, Caroline had been having a long running argument with her boss about overtime she did in the last week of September 2017. This was finally sorted out and she got a payment of £100 gross on Thursday 18th January. Although this payment related to work she did in the pay reference period 23rd September to 29th September 2017, too much time has passed for it to be included in the figure for that pay reference period. It will therefore count towards her pay for 13th to the 19th January.