Being paid below national minimum wage

[Bluebell567]

Hi all,

I’m in need of some advice/second opinions please, to ensure I’ve calculated this correctly before taking further action.

I work in a private daycare (term time only) so 39 weeks a year. My contract states that I get 5.6 weeks paid holiday a year (which is the statutory amount by law). So I am paid for a total of 44.6 weeks a year, working 5 days/40 hours a week.

(if you work term time only you’re still legally entitled to the statutory holiday entitlement of 5.6 weeks.)

my annual salary is currently £18,600 a year, gross. I am paid £1550 per month before tax & NI deductions etc , paid pro rata.

I have calculated this to be £10.43 an hour with the following calculation:

£18,600/44.6 = £417.04
£417.04/40 = £10.43

this does not reflect the recent increase in national minimum wage (£11.44 per hour), I have informed my manager of this and she has simply said that I have been getting above the NMW as I am term time only and getting paid monthly.

this is not the first time they have paid me incorrectly. I am planning to take this to the union but want to know that my calculations are correct before doing so.

thank you :)

FORGET THIS 😂

Do those 40hrs include lunch?

Wait no — the holiday is included within the 39 weeks, right? No added on the top? Of the 39 weeks, you’re allowed to spend 5..6 of them on holiday. Right?

This is where I’m confused. I need to know I’m solving this correctly, because if that’s the case then it is actually above NMW. Working pro rata is a nightmare when trying to work out things like this.

Yes, includes lunch break

@Bluebell567 and are you paid for that? Everywhere I have worked lunch has been unpaid.

You'll have less holidays if you're term time.
How many weeks are you off a year

Yes paid for my lunch break (says so in my contract) so I am paid for 40 hours weekly

www.gov.uk/calculate-your-holiday-entitlement

If you are pro rata, is your holiday entitlement not pro rata'd too?
5.6 * (39/52) = 4.2
Also, some of that annual leave will be bank holidays during term time (2 maybe?) So it would actually look more like 3.8 weeks leave. And that's assuming it is leave that you have to take outside of term time and you can't book whenever you want.

So 3.8 + 39 = 42.8
42.8 * 37.5 hours (40 less unpaid lunch break of 30 minutes) = 1605 hrs per year
18600 / 1605 = £11.59 per hour

(edited typo)

Surely the holiday entitlement should be pro rata as you don't work all year round? (39/52 x 5.6 = 4.2).

And yes, lunchbreaks would usually be unpaid.

Contract says 5.6 weeks paid holiday. They’ve worded it strangely but that is tailored to my specific contract.

I am in work a total of 39 weeks a year, which I am paid for pro rata. The rest of the weeks in the year I am off because daycare is closed and I am not actually paid for those weeks which is why I have the holiday entitlement

OP is correct that from 1 April 2024, term time workers are now entitled to 5.6 weeks holiday, not pro-rated.

I make the hourly rate the same as you, OP. Ask them to explain their calculations for you, itay be that they haven't implemented the change in law?

Obviously, it depends on the exact wording of your contract, but 5.6 full weeks would be well above the statutory requirement for a term time only job.

Are you sure that it isn't 5.6 weeks of a FTE contract?

Ok. I’d run past your union then. I’m TTO too, paid for 38wks plus 5.6wks holiday.

I didn't know this! Excellent, always seemed a bit unfair for term time only jobs.

In that case it would only be the 2 term time bank holidays affected, assuming the daycare closes on BH.

So 39 weeks, plus 5.2 holiday entitlement left = 44.2 weeks paid
44.2 * 37.5 = 1657.5 hours paid per year
18600 / 1657.5 = £11.22 per hour, and under NMW

First thing is to confirm what breaks you get and whether they are paid - this to calculate the actual hours worked.
If you are paid for 40 hours then it appears that your employer did not effect this years increase in NMW, which they should have , from April 1.

Talk to your payroll department , HR or your manager , whichever is available to you.

Actually, you're right. I stand corrected. The statutory entitlement is now 28 days.

That seems very unfair but the law's the law.

https://www.gov.uk/am-i-getting-minimum-wage

Suggest speaking to Acas

https://www.acas.org.uk/

@Bluebell567 This is the gov.uk guidance on how to approach this. https://www.gov.uk/national-minimum-wage/worker-disputes-over-minimum-wage

Are they like Tesco? They are not paying the nmw until May paypacket. Totally legal too. So the pay rise starts for any hours worked since may 1st 2024 not from April 2024 - you would still be on the old nmw for April.

https://www.theguardian.com/business/2024/mar/07/tesco-pay-rise-delay-minimum-wage

Is it term time only and you get 5.6 weeks holiday within that term time only period, or do you get 5.6 weeks holiday outside that so in the school holidays? If you get your allocation during term time then I’d expect you to still only be paid for the term time only period? As year round worker work 52 weeks and 5.6 weeks holiday is within that, w e don’t get paid for 57.6 weeks a year.

Thank you all so much for your messages. It’s been really insightful having second opinions.

I’ve taken it to the union now as after some thought, it won’t hurt to just get their advice :) I will update this thread with any relevant info in case it may help someone else who is in the same situation & sees it in the future

Even though your lunch break is paid, it doesn't count as working time for NMW calculations. You haven't said how long your lunch break is. If you have a one-hour lunch break, you are only working 35 hours per week for NMW purposes.

That's not right about paid lunch not counting towards nmw, for a salaried hours worker, which OP is. The Absence from work section here makes it clear that a paid lunch break included in contractual hours, counts:

https://www.gov.uk/guidance/calculating-the-minimum-wage/working-hours-for-which-the-minimum-wage-must-be-paid