Basic pay and the NMW

A worker’s basic pay must comply with the NMW. This basic pay can then be used to produce an “enhanced” rate for different shifts, for example “time-and-a-half”. However, the enhanced rate cannot be used as a basis for working out whether the NMW is being paid, even if a worker never receives only basic pay and always receives the enhanced rate.

If an employer increases a productivity target to fund a NMW increase and an employee who is unable or unwilling to meet the new target is dismissed as a result, that dismissal may be automatically unfair (Bopari v Grasshopper EAT/284/01).

If an employer reduces an existing bonus or attendance payment to fund a NMW increase, this will be an unlawful deduction from wages unless the employment contract expressly permits changes to wages without workers’ consent (Laird v Stoddart IRLR 591 EAT; Aviation & Airport Services Ltd v Bellfield EAT/194/00).