Hours and Pay: Employer Legal Guide

contracts hours pay

SECTION GUIDE

Employers have a wide range of statutory duties under UK employment law relating to pay, hours of work, breaks and the treatment of different categories of workers. These rules set minimum protections for both employees and limb (b) workers, while allowing employers the scope to design working arrangements that support operational needs. A clear understanding of the legal framework, including the Employment Rights Act 1996, the Working Time Regulations 1998, the National Minimum Wage Act 1998 and the Agency Workers Regulations 2010, is central to effective HR practice and reduces the risk of disputes, claims or regulatory breaches.

What this article is about
This article provides employers and HR professionals with a structured overview of the key legal considerations relating to hours and pay. It acts as a gateway to deeper guidance on specific areas, including wages and deductions, flexible working rights, entitlements for different worker types and statutory working time and rest requirements. The aim is to help employers identify the correct regulatory position for each issue and signpost where detailed compliance guidance is needed, while highlighting the importance of documenting decisions and maintaining accurate records as evidence of compliance.

Different workers have different rights to pay, breaks and working hours depending on their employment status, age, working pattern and contractual arrangements. Employers must take these differences into account when designing policies, setting pay structures and managing workforce needs. By correctly identifying employment status, applying the relevant statutory protections and keeping policies aligned with current legislation and official guidance, employers can ensure lawful practice, support workforce engagement and protect organisational resilience.

 

Section A: Pay and Deductions

 

Employers must ensure that all pay practices comply with statutory requirements and that workers receive their wages correctly and on time. Pay is one of the most heavily regulated areas of employment law, with specific rules governing minimum rates, statutory entitlements, deductions, pay during sickness, final pay on termination and rights relating to overtime, training, bonuses, pension contributions and related benefits. Key legislation includes the Employment Rights Act 1996, the National Minimum Wage Act 1998 and associated Regulations. Employers must maintain clear and consistent pay processes to avoid unlawful deductions, underpayment claims or breaches of the National Minimum Wage rules.

You can read our extensive guide to Pay and Deductions here >>

 

National Minimum Wage and National Living Wage

 

Employers must pay at least the applicable National Minimum Wage (NMW) or National Living Wage (NLW) based on a worker’s age and status. The rates are updated annually, and employers must ensure payroll systems reflect changes promptly. Non-compliance can lead to arrears being repaid to workers, financial penalties and reputational enforcement through public naming. The NMW and NLW are assessed over a pay reference period, usually tied to the worker’s pay cycle, and employers must ensure that when total pay is divided by total working time in that period, the result is at or above the statutory rate.

Employers must consider all time that counts as working time for NMW purposes, including time spent working, certain types of travel and, in many cases, time spent “on call” at the workplace or another place the employer requires. Deductions or payments relating to the provision of accommodation are subject to a specific accommodation offset, and only within that statutory limit can accommodation reduce pay for NMW calculation purposes. Employers must take particular care to ensure that deductions, unpaid working time, uniform costs or other charges do not reduce a worker’s pay below the relevant minimum wage in any pay reference period.

 

Statutory Sick Pay

 

Workers who are employees may qualify for Statutory Sick Pay (SSP) if they meet the relevant earnings threshold and satisfy the qualifying conditions for sickness absence. SSP is generally payable for up to 28 weeks of sickness. Employers must operate SSP correctly, verify sickness evidence in line with their policies and maintain accurate absence records. By law, medical evidence (such as a fit note) is only required after 7 calendar days of sickness absence, although employers may choose to request self-certification for shorter absences.

Following changes to the SSP regime and related schemes, employers can usually no longer reclaim SSP from HMRC, except in very limited circumstances. Many organisations choose to provide enhanced company sick pay. Where they do so, the contractual scheme must be administered carefully and consistently and must sit alongside the statutory SSP framework. Employers should make clear in contracts and policies whether company sick pay is discretionary or contractual and how it interacts with SSP.

 

Payslips

 

All workers, not just employees, are entitled to receive an itemised payslip. Payslips must show gross pay, each type of deduction and net pay. For time-paid workers, payslips must also show the number of hours for which payment is being made where pay varies based on the amount of time worked. Failure to provide compliant payslips may give rise to tribunal claims, particularly where workers believe that deductions or pay calculations have been handled inaccurately. Employers should ensure that payroll systems and processes are configured to provide itemised, transparent payslip information for every pay period.

 

If Wages Are Not Paid

 

Non-payment or late payment of wages can constitute an unlawful deduction under section 13 of the Employment Rights Act 1996 and may also amount to a breach of contract. Workers can bring claims in the employment tribunal, usually within three months of the last deduction or non-payment, or they may pursue claims in the civil courts. Repeated non-payment or serious failures to pay wages may, in some circumstances, contribute to a claim for constructive dismissal if the worker resigns in response to a fundamental breach of contract.

Employers must ensure payroll processes are reliable, that changes to pay are communicated and actioned promptly and that errors are investigated and corrected without delay. Where disputes arise about pay, employers should encourage early resolution through internal grievance procedures, with clear documentation of the investigation and outcome. Strong internal controls, approvals and reconciliations around payroll help to reduce the risk of errors and unlawful deductions.

 

Deductions from Pay and Wages

 

Employers may only make deductions from wages where permitted by law, authorised by the worker’s contract or agreed to in writing in advance. Statutory deductions include income tax, National Insurance contributions and court orders such as attachment of earnings orders. Contractual deductions may relate to salary advances, loans, overpayments or agreed costs for items such as equipment or training. Employers must ensure that any contractual provisions permitting deductions are clearly drafted and communicated to the worker before the deduction is made.

Deductions must not reduce a worker’s pay below the relevant minimum wage in the pay reference period. Particular care is needed where deductions relate to uniforms, equipment, meals or other items linked to work, as these may be treated as reducing NMW pay. Deductions for training costs must reflect genuine employer losses, be reasonable in amount and be supported by clear contractual wording. While employers generally have the right to recover genuine overpayments of wages without prior consent, this right must be exercised reasonably, with appropriate communication and a fair repayment plan where needed.

 

Final Pay When Someone Leaves a Job

 

Final pay must include all wages owed up to the termination date, any accrued but untaken holiday pay and any other contractual earnings, such as commission or bonuses where the worker remains entitled under the relevant scheme rules. Holiday pay must be calculated in accordance with the Working Time Regulations and any enhanced contractual arrangements in place. Employers should ensure that final pay calculations reflect both statutory and contractual holiday entitlement and that any outstanding payments are made promptly.

Employers may make legitimate deductions from final pay, such as for unreturned property, salary advances or certain training costs, provided these deductions are clearly authorised by contract or written agreement and remain consistent with NMW requirements for the relevant pay reference period. Where payment in lieu of notice (PILON) is made, its tax treatment will depend on whether the right to make PILON is contractual or non-contractual. Clear contractual drafting and consistent practice help reduce the risk of disputes about final pay.

 

Pay for Working Extra Hours

 

Where workers undertake overtime or additional hours, employers must ensure that pay calculations keep them above the statutory minimum rate when averaged across all hours worked in the pay reference period. Contracts should clearly set out whether overtime is compulsory or voluntary, how it will be authorised and whether it attracts enhanced rates. Employers should also consider how overtime interacts with working time rules, including the 48-hour weekly average limit and rest break entitlements.

For salaried-hours workers, special NMW rules apply. Employers must ensure that the salary, when divided by the total basic and additional hours required under the contract, meets or exceeds the applicable minimum wage across the reference period. Unpaid overtime or additional hours may only be lawful where allowed under the contract and where such arrangements do not reduce the worker’s average hourly pay below the NMW. Monitoring overtime patterns and regularly reviewing pay structures is critical to maintaining compliance.

 

Getting Paid for Mandatory Training

 

Training that is compulsory or required by the employer, whether for induction, compliance or skill development, will usually count as working time and must be paid accordingly. This applies even where training takes place outside normal working hours or on days when the worker would not ordinarily be expected to work. Employers must factor mandatory training time into both pay and working time calculations to ensure workers are not underpaid or placed in breach of working time rules.

Optional or voluntary training that is genuinely not required by the employer may be treated differently, but the distinction must be clear. Employers should make their expectations explicit in policies and communications, so workers understand when training is compulsory and how they will be paid. Records of training attendance and hours help to support compliance with both NMW and working time obligations.

 

Pay Rises

 

Employers may offer pay rises periodically through annual reviews, cost-of-living adjustments or performance-linked increases. Where pay rises are contractual, or form part of a collective agreement, employers must comply with those terms. Even where pay increases are discretionary, decisions must be taken fairly, transparently and based on objective criteria to reduce the risk of discrimination or equal pay claims.

Employers should consider equal pay obligations under the Equality Act 2010 when designing pay structures and awarding pay rises. Workers performing equal work, work rated as equivalent or work of equal value should receive equal pay unless the employer can objectively justify any difference. Documented pay frameworks and consistent application of criteria help to demonstrate that decisions are based on legitimate, non-discriminatory factors.

 

Bonuses and Commission

 

Bonus and commission schemes may be contractual or discretionary. Where schemes are contractual, employers must follow the agreed rules for calculation and payment and ensure that any performance criteria are applied consistently and objectively. For discretionary schemes, employers retain flexibility over whether to award bonuses and at what level, but they must still act reasonably, in good faith and without discrimination. Decisions about bonuses and commission should be evidence-based and documented.

Employers must also consider the impact of case law on holiday pay, particularly where workers receive regular commission or bonuses linked to performance. Decisions such as Bear Scotland and Lock v British Gas have established that, in certain circumstances, holiday pay should reflect normal remuneration, including regular commission or recurring bonus elements. Employers should take advice on how to structure bonus and commission schemes and how to calculate holiday pay so that it accurately reflects workers’ normal earnings where required.

 

Expenses

 

Employers should maintain a clear expenses policy setting out which business costs will be reimbursed, how claims should be submitted, what evidence is required and which approvals are needed. Failure to reimburse legitimate expenses may give rise to breach of contract or unlawful deduction claims, particularly where the employee has incurred costs on the employer’s behalf. Employers should ensure that managers understand and apply the policy consistently.

Tax treatment of expenses is governed by HMRC rules, which determine whether a payment is taxable or can be reimbursed free of tax. Employers should make sure their policy reflects current HMRC guidance and that payroll treatment aligns with the tax status of different types of expenses. Providing practical examples in the policy can help workers understand what they may claim and reduce the likelihood of disputes or non-compliant claims.

 

Tips and Service Charges

 

Under the Employment (Allocation of Tips) Act 2023, employers who have control or significant influence over tips, gratuities and service charges must pass these sums on to workers in full, other than lawful deductions for tax and National Insurance. Tips must be shared in a fair and transparent way, in accordance with a written tipping policy that is accessible to workers and consistent with the statutory Code of Practice.

Employers must keep records of how tips and service charges are received and distributed and must retain these records for the statutory period, generally three years. The Act includes enforcement mechanisms allowing workers to bring claims where tips have not been properly allocated. Employers operating tronc or similar arrangements should review their systems to ensure they comply with both tax rules and the new allocation regime under the Tipping Act and Code of Practice.

 

Workplace Pensions

 

Employers must comply with auto enrolment duties in relation to workplace pensions. This includes identifying eligible jobholders, automatically enrolling them into a qualifying pension scheme, making at least the minimum statutory contributions and providing prescribed written communications to workers. Employers must also process opt-outs and opt-ins correctly and ensure that payroll systems match pension contribution requirements.

Every three years, employers must carry out re-enrolment, assessing eligible workers who have previously opted out or ceased membership and re-enrolling them where required. They must also re-declare compliance to the Pensions Regulator within specified deadlines. Ongoing monitoring, accurate records and timely communication are essential to prevent underpayment of contributions and to demonstrate compliance in the event of an inspection or enquiry.

 

Section Summary: Pay and Deductions

 

Pay is a core compliance area that touches every part of the employment relationship. Employers must maintain lawful pay practices, ensure statutory entitlements such as minimum wage and sick pay are met and apply deductions transparently and only where lawfully permitted. Careful management of final pay, overtime, mandatory training time, bonuses, commission, expenses, tips and pension contributions is essential to avoid disputes and enforcement action. Clear pay structures, accurate payroll administration, robust documentation and compliant policies help prevent underpayment, reduce legal risk and support a fair and sustainable reward framework across the organisation.

 

Section B: Flexible Working

 

Flexible working has become a central feature of modern workforce management, with statutory rights giving workers the ability to request changes to their working arrangements. Employers must handle such requests fairly and lawfully, ensuring decisions support both organisational needs and individual circumstances. Effective flexible working practices can enhance productivity, support retention and improve wellbeing, but they must be managed with clarity, consistency and reference to legal obligations, including the Employment Rights Act 1996 and the Equality Act 2010.

 

Statutory Flexible Working Requests

 

Workers with the required length of service have the statutory right to make a formal flexible working request. A request may relate to hours, times or location of work. Employers must follow the statutory process, which includes dealing with the request reasonably, consulting with the worker and issuing a decision within the statutory timeframe. A request may only be refused for one or more of the statutory business grounds, such as additional costs, detrimental impact on quality or performance, inability to reorganise work or insufficient work during proposed periods.

Workers may submit only a limited number of statutory requests in a defined period, subject to legislative updates. Employers should ensure HR and line managers understand the statutory grounds, consultation requirements and the need for documentation supporting the decision, particularly where a request is refused.

 

Implementing Flexible Working

 

Once a flexible working request is approved, employers must update the worker’s terms and conditions to reflect the new arrangement. This may include revised hours, location, working patterns or reporting lines. Implementation may involve a trial period, allowing both parties to assess suitability. Employers must ensure fairness and consistency across teams and avoid decisions that disproportionately disadvantage protected groups under the Equality Act 2010.

All changes must be recorded in updated statements of employment particulars. Clear communication, documented decision-making and regular check-ins during any trial period support effective implementation and reduce the risk of disputes or misunderstandings.

 

Requests for Home or Hybrid Working

 

Flexible working requests increasingly relate to home working or hybrid patterns. Employers must assess whether the role is suitable for remote work, considering confidentiality, data protection compliance under UK GDPR, supervision requirements, productivity expectations and operational needs. Health and safety obligations under the Health and Safety at Work etc. Act 1974 apply to homeworkers, and employers must ensure risk assessments are completed where appropriate.

Hybrid working arrangements require structured expectations around office attendance, equipment responsibilities, working hours, availability and communication. Decisions should be objective, based on legitimate business needs and documented to support consistency and transparency across the workforce.

 

Home and Hybrid Working Policies

 

Employers should maintain clear and comprehensive home and hybrid working policies. Policies should address eligibility, performance expectations, minimum office attendance, equipment and expense arrangements, data security and acceptable use protocols. Confidentiality, cyber security and secure document handling must feature prominently, given the increased risks associated with remote working environments.

Policies should also address health and safety responsibilities, including how workers should set up safe working environments and how employers will conduct risk assessments. Clear policies enable managers to apply consistent standards and ensure that workers understand expectations and entitlements.

 

Managing Employees Who Work from Home

 

Managing remote workers requires proactive oversight. Employers should ensure regular communication, clear performance objectives and consistent supervision. Processes for addressing underperformance, attendance concerns or misconduct must operate with the same rigour as for on-site workers. Performance management must reflect outputs and deliverables, rather than physical presence, while ensuring fairness across remote and office-based staff.

Employers must also consider employee wellbeing, preventing isolation, stress and blurred work–life boundaries. Regular check-ins, workload monitoring and access to support services are key elements of responsible remote working management. Remote workers must remain aware of conduct expectations, data protection duties and confidentiality requirements, and employers must ensure these obligations are reinforced and monitored.

 

Section Summary: Flexible Working

 

Flexible working can provide significant benefits for employers and workers when managed lawfully and consistently. Employers must handle statutory requests correctly, apply fair and objective criteria and ensure home and hybrid working arrangements are supported by robust and transparent policies. Effective management of flexible arrangements enhances productivity, reduces legal risk and contributes to a stable and engaged workforce.

 

Section C: Rights for Different Workers

 

Different categories of workers hold different rights relating to pay, working hours, breaks and general workplace treatment. Employers must understand these distinctions to ensure lawful management practices and avoid breaches of contract, discrimination claims or enforcement action. Worker status affects entitlement to statutory rights, and misclassification can lead to significant liabilities. Clear contractual documentation, accurate assessment of status and consistent HR practice are essential in maintaining compliance.

 

Agency Workers

 

Agency workers benefit from statutory rights under the Agency Workers Regulations 2010, including equal treatment in basic pay and working conditions after completing the 12-week qualifying period with the same hirer. The former “Swedish derogation” arrangements, which previously allowed some differences in pay, have been abolished, so agency workers are now entitled to equal pay with comparable direct recruits after the qualifying period. From day one of an assignment, agency workers are entitled to certain rights such as access to collective facilities and information about job vacancies.

Responsibility for compliance is shared between the agency and the hirer. Agencies will usually be responsible for pay, while hirers are typically responsible for providing information on workplace conditions, facilities and vacancy access. Employers should ensure that contractual arrangements and communication with agencies clearly set out responsibilities, and that internal HR teams understand the equal treatment obligations applying to agency workers.

 

Part-time Workers

 

Part-time workers must not be treated less favourably than comparable full-time workers under the Part-time Workers (Prevention of Less Favourable Treatment) Regulations. They are entitled to pro-rated pay, holidays, rest breaks, pension contributions and contractual benefits, unless there is an objective justification for any difference in treatment. Employers must ensure that differences are based on legitimate business needs rather than convenience or custom.

Recruitment, promotion and training opportunities must also be available on equal terms for part-time workers. Policies and practices that inadvertently disadvantage part-time workers, such as scheduling key meetings or development activities at times they cannot attend, may expose employers to claims. Conducting equality impact assessments and reviewing policies regularly can help identify and address potential issues.

 

Zero-hour Contracts

 

Workers on zero-hour contracts have no guaranteed hours but retain entitlement to core statutory rights, including the National Minimum Wage, paid holiday, rest breaks and protection from unlawful deductions. Exclusivity clauses preventing zero-hours workers from working for other employers are generally prohibited, reflecting protections introduced by the Small Business, Enterprise and Employment Act 2015. Employers must ensure contractual terms and practices do not deter workers from taking on additional work elsewhere where that is their choice.

Zero-hours workers must be paid for all working time, which may include time spent at the workplace waiting to be allocated tasks where they are required to be present. Employers should provide clarity on how shifts will be offered, the level of flexibility required and any processes for declining work. Transparent scheduling and fair allocation of work help to maintain trust and reduce the risk of disputes over hours and pay.

 

Apprentices

 

Apprentices are entitled to specific protections under both statutory and common law apprenticeship frameworks. They must receive at least the applicable apprentice minimum wage and be given protected time for training, both on and off the job. Working hours must comply with the Working Time Regulations, and apprenticeships typically require structured supervision, mentoring and investment in formal learning.

There is an important distinction between traditional common law apprenticeships and statutory apprenticeship agreements. Common law apprenticeships offer stronger protection, making termination more complex and potentially costly for employers. Statutory apprenticeship agreements, where properly drafted and compliant with legislation, offer greater flexibility over termination and are generally preferred for risk management. Employers should ensure their apprenticeship documentation aligns with statutory requirements and that training providers fulfil their obligations.

 

Young Workers

 

Workers aged 16–17 (young workers) benefit from enhanced protections relating to working hours, rest breaks and night work. In general, they must not normally work more than 8 hours per day or 40 hours per week and are prohibited from most night work. They are entitled to longer rest breaks and increased daily and weekly rest periods compared with adult workers. Employers must ensure rostering and scheduling practices reflect these limits.

For children under school leaving age, additional restrictions apply on the type of work they can perform and the hours they can work, including local by-laws and permit requirements. Employers must pay particular attention to health and safety, ensuring suitable risk assessments, training and supervision are in place. Failure to comply with young worker protections can lead to enforcement action and damage to the organisation’s reputation.

 

Section Summary: Rights for Different Workers

 

Worker rights vary significantly depending on status, age and contractual arrangements. Employers must correctly identify the category of each worker and apply the relevant statutory protections, including those for agency workers, part-time staff, zero-hours workers, apprentices and young workers. Properly drafted contracts, clear policies and informed HR practice are critical to ensuring lawful and consistent treatment. By taking a structured approach to worker status and related entitlements, employers can reduce legal risk, support fair treatment and maintain a well-managed workforce.

 

Section D: Working Time and Rest

 

Working time rules protect workers from excessive hours and ensure adequate rest to support health, safety and wellbeing. Employers must understand the statutory framework and apply it consistently across different working patterns, including shift work, night work, hybrid arrangements and irregular hours. Key legislation includes the Working Time Regulations 1998, which implement requirements on maximum weekly working time, rest breaks and night work assessments. Non-compliance can lead to enforcement action, reputational harm and operational disruption. Clear rostering, accurate records and well-drafted policies help employers meet their obligations.

 

Working Time Rules

 

The Working Time Regulations set the maximum average working week at 48 hours, averaged over a 17-week reference period unless a different reference period applies. Workers may voluntarily opt out of the 48-hour limit, but such agreements must be in writing and freely given. Employers must maintain accurate records of working time for a minimum of two years to demonstrate compliance.

The Regulations also set requirements relating to night work. Night workers should not work more than an average of 8 hours in any 24-hour period, and employers must offer free health assessments to night workers before they start night work and at regular intervals thereafter. Certain roles and sectors, such as emergency services, transport and security, may be subject to modified or exempt rules, requiring specific compliance measures.

 

Rests and Breaks at Work

 

Workers are entitled to minimum rest periods, including a 20-minute uninterrupted break during shifts lasting more than six hours, 11 hours’ daily rest and 24 hours’ weekly rest (or 48 hours over a 14-day period). Rest breaks must be taken during the working day and cannot be added to the start or end of shifts. Certain sectors may provide compensatory rest where standard entitlements cannot be given, provided the alternative rest arrangements are equivalent in value.

Young workers benefit from enhanced protections, including longer breaks and stricter limits on daily and weekly working hours. Employers must ensure that working patterns do not place young workers in breach of the law and that schedules account for their additional rest needs. Clear break scheduling, proactive monitoring and training for managers help to ensure compliance and minimise operational issues.

 

Lay-offs and Short-time Working

 

Lay-offs and short-time working may be used where there is a temporary reduction in work, but employers may only implement these arrangements where the employment contract expressly permits it or where the employee consents. During lay-offs, employees may be entitled to statutory guarantee pay, which is subject to daily and weekly limits. Employers should ensure that the contractual basis for implementing lay-offs or reduced hours is clear, documented and communicated to affected workers.

Prolonged lay-offs or extended periods of short-time working may entitle employees to claim redundancy under sections 135–151 of the Employment Rights Act 1996. Employers should therefore monitor such arrangements closely and consider the wider impact on employee relations, financial stability and workforce planning. Early consultation and transparent communication can help manage expectations and reduce the likelihood of formal claims.

 

Section Summary: Working Time and Rest

 

Employers must apply working time rules consistently and transparently, ensuring workers receive their statutory rest entitlements and that working hours are monitored effectively. Temporary measures such as lay-offs and short-time working require a clear contractual basis and careful management. Robust policies, accurate records, fair scheduling and informed decision-making support compliance, protect worker wellbeing and reduce the risk of legal challenge.

 

FAQs

 

What rights do workers have to breaks and rest?
Workers are entitled to minimum rest periods under the Working Time Regulations, including daily rest, weekly rest and a 20-minute uninterrupted break during shifts lasting more than six hours. Young workers have enhanced protections, and certain sectors have modified rules. Employers must ensure rest entitlements are provided in practice and not simply written into policy.

Can employers make deductions from pay without written consent?
Only statutory deductions, contractually authorised deductions or deductions agreed to in advance in writing are lawful. Other deductions may constitute an unlawful deduction from wages under the Employment Rights Act 1996, exposing employers to tribunal claims and repayment obligations.

Who can make a statutory flexible working request?
Eligible workers with the required length of service may request flexible working to change their hours, times or location of work. Employers must handle requests reasonably, consult with the worker and make decisions based on statutory business grounds.

How does worker status affect rights to hours and pay?
Employees, workers, agency staff, part-time workers, zero-hours workers, apprentices and young workers all have different statutory protections and entitlements. Employers must correctly determine each individual’s legal status to ensure compliance with rights relating to pay, hours, breaks and equal treatment.

What records must employers keep for working time compliance?
Employers must maintain accurate records of hours worked, night work assessments and rest entitlements for a minimum of two years to demonstrate compliance with the Working Time Regulations. Good record-keeping also supports lawful rostering and overtime management.

What happens if an employer fails to pay minimum wage?
If a worker is underpaid the National Minimum Wage or National Living Wage, employers must repay arrears at the current rate and may face financial penalties. HMRC may also publish the names of employers found to be in breach.

Can overtime be compulsory?
Overtime can be compulsory only where the employment contract expressly allows it. Even where compulsory, employers must ensure that overtime arrangements do not breach working time limits and do not reduce the worker’s pay below the National Minimum Wage when averaged across the pay reference period.

 

Conclusion

 

Hours and pay rules form a central pillar of UK employment law, shaping how employers structure work, manage staff and meet statutory obligations. Ensuring lawful payment practices, fair scheduling and consistent treatment across different worker groups is essential for maintaining compliance and supporting workforce stability. Employers who understand the interaction between pay obligations, flexible working rights, worker status and working time rules are better equipped to minimise disputes and uphold a positive employment relationship.

Clear policies, robust payroll systems and accurate working time records all contribute to effective compliance. By applying the principles outlined across pay and deductions, flexible working, worker rights and working time management, employers can create lawful, transparent and efficient working arrangements that support both operational needs and employee wellbeing. Detailed record-keeping, well-drafted policies and consistent decision-making are vital to demonstrating compliance and reducing legal risk.

 

Glossary

 

Agency WorkerAn individual supplied by an agency to work temporarily for a hirer, entitled to equal treatment in basic working and employment conditions after the 12-week qualifying period.
ApprenticeA worker employed under a statutory apprenticeship agreement or common law apprenticeship, combining paid work with structured training and entitled to specific wage rates and protections.
Flexible Working RequestA statutory request made by a qualifying worker to change hours, times or location of work, which employers must consider reasonably and respond to within legal timeframes.
Lay-offA temporary situation where an employer provides no work and no pay for a short period, lawful only where contractually permitted or agreed, and subject to statutory guarantee pay.
National Minimum Wage (NMW)The statutory minimum hourly pay most workers are entitled to, varying by age and status.
National Living Wage (NLW)The statutory minimum wage rate applying to workers above a specified age threshold, reviewed annually.
Short-time WorkingA temporary reduction in working hours and pay, lawful only with contractual authority or the worker’s agreement.
Statutory Sick Pay (SSP)A statutory payment made by employers to eligible employees who are unable to work due to illness, payable for up to 28 weeks.
Working Time RegulationsLegislation setting limits on weekly working hours, rest breaks, night work and related protections for workers.
Zero-hour ContractA contract under which no hours are guaranteed but the worker retains core statutory rights, including minimum wage, holiday pay and rest breaks.

 

Useful Links

 

GOV.UK – Minimum Wage RatesNational Minimum Wage and National Living Wage guidance for employers
GOV.UK – Statutory Sick Pay (SSP)Employer guidance on SSP eligibility, evidence and payment rules
GOV.UK – PayslipsLegal requirements for itemised payslips
GOV.UK – Flexible WorkingStatutory flexible working requests and employer obligations
GOV.UK – Agency Worker RightsEqual treatment rules and qualifying periods for agency workers
GOV.UK – Working Time RegulationsRules on weekly working hours, rest breaks and night work
GOV.UK – Lay-offs and Short-time WorkingGuidance on contractual requirements and guarantee pay
GOV.UK – Tips and Service ChargesEmployment (Allocation of Tips) Act 2023 and Code of Practice
GOV.UK – Workplace PensionsEmployer duties for auto enrolment and pension compliance

 

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About our Expert

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Anne Morris

Founder and Managing Director Anne Morris is a fully qualified solicitor and trusted adviser to large corporates through to SMEs, providing strategic immigration and global mobility advice to support employers with UK operations to meet their workforce needs through corporate immigration.She is recognised by Legal 500 and Chambers as a legal expert and delivers Board-level advice on business migration and compliance risk management as well as overseeing the firm’s development of new client propositions and delivery of cost and time efficient processing of applications.Anne is an active public speaker, immigration commentator, and immigration policy contributor and regularly hosts training sessions for employers and HR professionals.
Picture of Anne Morris

Anne Morris

Founder and Managing Director Anne Morris is a fully qualified solicitor and trusted adviser to large corporates through to SMEs, providing strategic immigration and global mobility advice to support employers with UK operations to meet their workforce needs through corporate immigration.She is recognised by Legal 500 and Chambers as a legal expert and delivers Board-level advice on business migration and compliance risk management as well as overseeing the firm’s development of new client propositions and delivery of cost and time efficient processing of applications.Anne is an active public speaker, immigration commentator, and immigration policy contributor and regularly hosts training sessions for employers and HR professionals.

Legal Disclaimer

The matters contained in this article are intended to be for general information purposes only. This article does not constitute legal advice, nor is it a complete or authoritative statement of the law, and should not be treated as such. Whilst every effort is made to ensure that the information is correct at the time of writing, no warranty, express or implied, is given as to its accuracy and no liability is accepted for any error or omission. Before acting on any of the information contained herein, expert legal advice should be sought.