ESM5005 - National Minimum Wage

Where entitlement to a minimum wage exists because of the rights a worker has under the National Minimum Wage Act 1998, it does not mean that he/she necessarily works under a contract of employment. Employed workers and some self-employed workers are covered by the Act. However, the National Minimum Wage Act provides that qualifying workers are entitled under their contract to be paid at a rate equivalent to the national minimum wage. The right to be paid at a rate equivalent to the minimum wage becomes an implied term in the worker’s contract.

The only effect this entitlement is likely to have is in the reduction of financial risk in some cases and this is unlikely to be a factor that will tip the balance to a contract of service.