National minimum wage

Employers can pay the National Minimum Wage (NMW) net even if they have not made deductions for tax and national insurance.

The facts

Mr Sandercock was employed under a contract which treated him as self employed. This meant that tax and national insurance was not deducted from his wages. His pay was based on the NMW but Sandercock was actually paid less than this amount. He claimed he should have been paid the full rate of the NMW.

The ruling

The EAT held that the employer had been right to pay Sandercock a net sum which was less than the NMW rate. In cases like this the tribunals have to work out what the worker's gross pay was and if it equalled the NMW after deductions then the employee was not being underpaid.

* Joshi v Sandercock EAT/1140/02