Understanding National Minimum Wage law

Records and reporting - best practice

As an employer you are legally required to keep sufficient records showing you are complying with the National Minimum Wage (NMW) requirements. It is a criminal offence to fail to do so and you could be fined.

Your records will be used in the event of a dispute, where the burden is on you as the employer to prove that you have paid the NMW. You must also produce records for inspection if requested by your workers or an HM Revenue & Customs minimum wage compliance officer.

It is good practice to display information about current NMW rates in the workplace, as well as the HM Revenue & Customs National Minimum Wage Helpline number. You can learn about the current rates of National Minimum Wage on the DTI website.

Required records
You must decide what counts as sufficient records for your business. Depending on your business, sufficient records might include details of:

• gross pay payments
• payments for overtime and shifts
• absences
• contracts and agreements between you and your workers

For information on record-keeping, download the National Minimum Wage information for employers guide from the HM Revenue & Customs website (PDF), and see our guide on how to keep the right staff records.

If your workers are paid well above the NMW, the pay records kept for PAYE and National Insurance contributions may be adequate for NMW purposes.

If your workers work a significant number of hours during their pay period, there is a greater possibility that they are not being paid the NMW and other records may be appropriate.

For how long should records be kept?
The law requires employers to keep records for at least three years after the pay period following the one that the records cover. However, because a civil case may be brought against you up to six years after an alleged failure to pay the NMW, it is advisable to keep your records for at least six years.

Subjects covered in this guide

• Introduction
• National Minimum Wage rates
• Who is entitled and who is exempt?
• What is included and not included?
• The four types of work
• Calculating hours worked and paid leave
• Records and reporting - best practice
• Enforcement and penalties
  

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