Record-keeping - what records must be kept and for how long?
What records count as 'sufficient' records?
The regulations do not state what count as 'sufficient' records. This is in order to provide flexibility. The situation will vary from employer to employer and from worker to worker. It is left to your own judgement in each case.
However, you should be aware that if a worker brings a claim for unpaid national minimum wage (NMW) to a tribunal or court, the burden will be on you to prove that the NMW has been paid. You will need records to enable you to provide this proof.
The following paragraphs provide some general advice which should help you decide what type of NMW records you should keep. Generally, if you are keeping full payroll records this should be sufficient for NMW purposes.
If you are unsure if you are keeping sufficient records, you may wish to seek independent legal advice.
It is for you to judge when, for any particular worker, you should keep more detailed records specific to payment of the NMW.
Examples of records that may count as 'sufficient':
- Total pay paid to the worker, and the hours worked by the worker.
- Overtime/shift premia.
- Amount of unconsolidated allowances.
- Any deduction or payment for accommodation.
- The amount representing tips paid to the worker through the payroll. Note that tips only counted towards NMW pay up to 1 October 2009 - see our guide on national minimum wage - what counts as NMW pay, benefits in kind and accommodation.
- Any 'daily average' of hours to be worked - calculated as shown in the section on unmeasured work in our guide to the national minimum wage - hours for which the NMW must be paid.
- Any absences, for example, rest breaks, sick leave, holiday.
- Any travel or training during work hours and its length.
- Bank statements or other commercial documentation.
The above is not intended to be a definitive or comprehensive list. The details of records to be kept may differ from case to case and also according to the type of work being done.
Do the records need to be in any particular form?
The records do not have to be kept in any particular form. They can be kept on paper or on computer, for example. But you must be able to produce the records for an individual pay reference period (PRP) for an individual worker in a single document on request.
How long do NMW records need to be kept?
You must keep records for a minimum of three years after the end of the PRP following the one that the records cover. For example, if a person is paid each calendar month, their records for the month of May 2008 would have to be kept until the beginning of July 2011.
Although the rules do not require you to keep records for any longer than three years, you should be aware that a civil case can be brought before a court for up to six years (five years in Scotland) after an alleged failure to pay the NMW. In such a case, it would still be for you to prove that you had paid the NMW.
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