Compliance with UK National Minimum Wage

The Payroll Setup > Minimum Wage feature helps employers meet National Minimum Wage (NMW) compliance requirements by flagging potential issues where employees are paid below the applicable HMRC minimum hourly rates. Dayforce performs a check for the specified pay reference period. The feature calculates each employee’s hourly rate based on the configured earnings and deductions, then compares the calculated rate against the applicable NMW rate

A pass or fail assessment is shown in Payroll > Pay Run Management in the Preview tab in the Minimum Wage subtab. The feature also considers off-cycle pay runs, salary sacrifice earnings as well as employees who are only employed during part of a pay period.

The feature supports salaried workers, as well as timed workers, as determined by HMRC guidelines.

• For timed workers, the Minimum Wage feature uses hours worked which are recorded as quick entries or from timesheets.
• For salaried workers, the feature uses hours that are calculated as follows:
• Normal weekly hours × 52 / number of pay periods

Configuring the Minimum Wage feature in Dayforce involves the following steps:

1. Configure earnings for work performed across multiple pay periods for use in the Minimum Wage feature.
2. Set up earning and deduction groupings. See Add Payroll Groupings in the Dayforce Implementation Guide.
3. Set up employee data mapping rule and qualifiers for NWM worker category. See Create Employee Data Mapping Rule for NMW Compliance.
4. Assign the employee property NMW Worker Category and its applicable value to each employee record in the Employment > Employment Properties screen in People.
5. Set up National Minimum Wage rule. See Configuring UK National Minimum Wage Rule.
6. Assess compliance in Payroll > Pay Run Management in the Preview tab, in the Minimum Wage subtab.

Work Performed Across Multiple Pay Reference Periods

When work is performed across more than one pay reference period, or can’t be clearly attributed to a single period, the employer must determine how the work is allocated across periods for National Minimum Wage purposes. The Minimum Wage feature uses this allocation to calculate the pay amount used in the pay reference period. The allocation is configured in the earning record in Payroll Setup > Earnings and Deductions in the Options subtab. In the NMW Calculation Basis drop-down list, select either Annual, Bi-Annual, Quarterly, or Custom. The following table shows how pay is allocated in the year based on the pay frequency and the option you’ve selected in the NMW Calculation Basis drop-down list.

How pay is allocated in the year based on pay frequency

Pay Frequency	Quarterly Divisor	Bi-Annual Divisor	Annual Divisor
Weekly	13	26	52
Biweekly	6	13	26
Every four weeks	3	6	13
Monthly	3	6	12

For example, when you’ve configured a quarterly allocation method, an employee who is paid monthly and receives £1000 bonus will have £333.33 allocated in each pay reference period.