Pay - an overview of obligations

Guarantee pay

Employees may have the right to fallback pay, or guarantee pay, if you don't need them to do the work of the kind you employed them for, eg because there is a downturn of work in your business or as a result of occurrences such as power cuts or floods.

If you don't provide the employee with work throughout a complete day, during which they would normally be required to work, they are entitled to a statutory guarantee payment. The maximum payment they can get is five days in any period of three months.

The amount of guarantee payment for any day is calculated by multiplying the number of normal working hours for the day in question by the guaranteed hourly rate, subject to an upper limit for any one day, which is currently £18.40 per day.

The right to guarantee pay applies only to employees, not other workers. See our guide on employment status.

You do not have to pay guarantee pay if:

• the employee's contract is for three months or less
• they are not available to work
• you offer them suitable alternative work
• they are on strike or cannot work because of a strike
• they have been continuously employed for less than one month
• their employment contract does not require them to accept work that is offered to them
• you have a collective agreement covering guarantee pay that has been approved by the appropriate government minister

If you don't give employees the guarantee pay to which they are entitled, they have three months to complain to an employment tribunal.

Subjects covered in this guide

• Introduction
• Issuing pay statements
• Statutory Maternity, Paternity and Adoption Pay
• Statutory Sick Pay
• Guarantee pay
• Complying with the National Minimum Wage
• Rates and calculation of the National Minimum Wage
• Paying workers holiday pay
• Making deductions
• Calculating final pay

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