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Document updated/added on 14.02.2020

Topic: Pay and pensions

Unmeasured worker daily average agreement
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Unmeasured worker daily average agreement

Unmeasured worker daily average agreement

Where a worker performs unmeasured work for the purposes of the national minimum (NMW) and national living wage (NLW), you can enter into a daily average agreement of hours with them.

What’s unmeasured work?

For NMW and NLW purposes, unmeasured work is any other work that’s not time, salaried hours or output work. It’s a residual category which is designed to catch anything that doesn’t fall into one of the other three categories. It’s characterised by the absence of relationship between the work being performed, the time spent performing the work and the amount of the payment. For example, it includes being paid a set amount to do a particular task regardless of how long it takes the worker to do it. To calculate the working hours of unmeasured workers in a pay reference period, you can either record every hour the worker actually works (and then pay them at least the NMW/NLW for those hours), or you can enter into a daily average agreement of hours.

Daily average agreement

A daily average agreement is when you and the worker agree a typical number of hours per day that they expect to work on average. One agreement can cover several pay reference periods, e.g. weeks if the worker is paid weekly, provided there’s no change in the daily average number of hours. A daily average agreement must be made in writing before the beginning of the pay reference period (or periods) to which it relates, and specify the average daily number of hours the worker is likely to spend working, where they’re available to work for the full amount of time contemplated by their contract - if challenged, you must be able to show that this average is a reasonable estimate, so you need to be realistic. You can use our Unmeasured Worker Daily Average Agreement as the basis for your agreement. It requires you to simply specify the average daily number of hours and it has effect solely for determining the amount of unmeasured work that the worker is to be treated as having worked for NMW/NLW purposes, i.e. it doesn’t vary their contract. If your agreement covers ongoing pay reference periods, ensure you revisit it periodically to assess if the average number of hours agreed remains an accurate reflection of what happens in practice. If a valid agreement exists, then the worker must be paid the NMW/NLW for the amount of hours specified in the agreement for each day worked in the pay reference period if they have been available to carry out their duties for at least the full amount of their contractual hours. If the worker is only available for part of their contractual hours, they must be paid for the proportion of the average daily number of hours which that part bears to the full amount of contractual hours.

 

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