Entitlement to minimum wage and exemptions

Generally, the NMW applies to all workers over compulsory school age who ordinarily carry out work in the UK. As such, it does not matter what label is given to the individual; so long as they are carrying out work to fall within the definition of a worker they will be entitled to NMW.

This includes:

• agency workers
• homeworkers
• casual workers
• temporary workers.

Those who are genuinely self-employed are not entitled to minimum wage (see ‘Employment status’ for details on how to determine whether an individual is genuinely self-employed or not). There are also some exemptions to the entitlement to NMW – see ‘exemptions’ below.

Apprentices are also entitled to the NMW apprentice rate where they are aged under 19, or over 19 but in the first year of the apprenticeship, and they are working under a contract of apprenticeship, apprenticeship agreement or a government apprenticeship scheme. Once the apprentice reaches the age of 19, or they are over 19 and are in the apprenticeship for longer than one year, they become entitled to the NMW rate that applies to their age.

Special rules apply to agricultural workers – see ‘agricultural workers’ in the next section.

Exemptions to entitlement

Family member exemption

Workers who live and work in the employer’s household are exempt from NMW laws so long as the following apply:

• the worker is a member of the employer’s family
• the worker lives in the employer’s family home, and
• the worker shares in the family’s tasks and activities.

Alternatively, where the worker is not a member of the family, the following must apply:

• the worker lives in the family home of their employer
• the worker is not a member of that family but is treated as such (e.g. in relation to living space, meals, sharing of family tasks, and participation in leisure activities)
• the worker is not required to pay, or have money deducted, for the provision of accommodation or meals, and
• the work would not be treated as work if it had been done by a member of the employer’s family.

When considering whether the worker is treated as a member of the family, other factors can also be examined, such as whether they are treated with dignity, are afforded autonomy or privacy, and are not exploited.

Work experience students

Students who carry out work experience placements are exempt from NMW where:

• the placement is no longer than 12 months and
• the placement is required as part of a UK-based higher or further education course.

Work experience can also be known as a “placement” or “internship”. Where this experience does not fall within the criteria above and the individual is carrying out ‘work’ during the experience, they will be entitled to NMW.

Volunteers and voluntary workers

True volunteers are not classed as ‘workers’ meaning they are not entitled to receive NMW or NLW.

Usually, to be classed as a volunteer, the individual should not:

• have a contract of employment or a contract to perform work or services, or
• receive remuneration or benefits in kind for volunteering.

Having a volunteer agreement in place which outlines the expectations of the volunteer and the culture of the organisation will not make the volunteer a worker, so long as this is not an employment contract or a contract to perform work or services.

Additionally, a decision to reimburse volunteer expenses will not make the volunteer a worker so long as the expenses are paid to reimburse expenses occurred by volunteers to carry out their volunteer role.

A voluntary worker is exempt from minimum wage. A voluntary worker is an individual who is only entitled to reimbursement of expenses and works for:

• a charity
• a voluntary organisation
• an associated fundraising body eg a charity shop
• a statutory body, or
• Community Amateur Sports Clubs registered with HMRC under the Finance Act 2002.

The reimbursement of expenses must be in relation to expenses incurred in the performance of duties, or in order to enable the voluntary worker to perform the duties e.g. travel, lunch or purchasing items required by their duties. The value of reimbursement must equate to the actual costs of the expenses or a reasonable estimate of the expenses.