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Employment Rights, National Minimum Wage, Redundancy, Employment Law, Redundancy Pay, Compromise Agreement

January 25th, 2011 · No Comments · About Compromise Agreement Blog, Compromise Agreement Solicitor, Compromise Agreement Solicitors, Compromise Agreements, Employment Lawyers, Employment Solicitors, Employment Tribunals, Redundancies, Redundancy, Redundancy law, Redundancy Pay, Your Compromise Agreement is a Binding Contract

Since 1 January 2011, expenses paid to workers to cover their travel costs to a temporary workplace (including related subsistence and accommodation costs) will not form part of the workers’ pay for National Minimum Wage (NMW) purposes. This amendment is embodied in the National Minimum Wage (Amendment) (No.2) regulations 2010.

Some employment businesses and umbrella companies operate schemes which require workers to make a salary sacrifice in return for payment of travel and subsistence expenses. There was a consultation in early 2010 on this issue. The Government’s main concern was that the travel and subsistence schemes in place were exploiting temporary workers paid at or near NMW, as:-

 Most participating temporary workers did not fully understand how these schemes worked; and

  • The schemes could adversely affect workers, including their eligibility for earnings-related social security benefits.

 The regulations amend the National Minimum Wage Regulations 1999 to exclude expenses payments for travelling to a temporary workplace from counting towards the NMW. 


Those employment businesses and “umbrella companies” that have workers who are both paid NMW and who participate in these schemes must ensure that these workers receive NMW after expenses deductions have been made.

If you require legal advice on a compromise agreement,  please contact RT Coopers  at

© RT COOPERS, 2011. This Briefing Note does not provide a comprehensive or complete statement of the law relating to the issues discussed nor does it constitute legal advice. It is intended only to highlight general issues. Specialist legal advice should always be sought in relation to particular circumstances


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