As a homeworker, am I entitled to the minimum wage?

Yes. All homeworkers must get at least the National Minimum Wage (NMW) rate for each hour that they work. If your employer is attempting to avoid paying the NMW, for example by arguing that you are ‘self-employed’, speak to your union for advice.

Here are the National Minimum Wage (NMW) rates as of 1 April 2017:

  • The hourly rate for workers aged 25 and over should is £7.50 an hour (called the National Living Wage).
  • The hourly rate for workers aged 21 to 24 should is £7.05,
  • The hourly rate for workers aged 18 to 20 is £5.60.
  • The hourly rate for workers aged 16 and 17 is £4.05 per hour.
  • For apprentices under 19, or 19 or over but in the first year of their apprenticeship, the National Minimum Wage hourly rate is £3.50 an hour.

Hourly pay for the NMW is worked out as an average over your 'pay period'. If you are paid weekly, your pay period is a week. If you are paid daily, then the pay period is a day. Dividing gross pay for the pay period by the number of hours worked gives the hourly rate.

However, many homeworkers are paid not by the hour, but by what they produce (their output), or upon completion of a specific job.

An employer has to pay a piece-rate worker the NMW per hour for all hours worked, or pay 120% of the NMW for the number of hours it takes an average worker to complete an agreed block of work.

The employer has to carry out tests to establish the time it takes an average worker to complete the work. For example, if the tests show that for a particular job, the average worker (aged 25 or over) can complete 10 pieces an hour, the employer must pay the workers at least 90p per piece in order to pay the current national living wage rate of £7.50 per hour (i.e. £7.50 times 120% divided by 10 pieces equals 90p).

The 120% calculation was introduced to reflect that whilst the average (mean) worker would complete the estimated amount of work in one hour, some workers – perhaps 50% – would complete it more slowly, and would therefore receive less than the equivalent of the NMW per hour were the price per piece paid at 100% of the NMW. The 120% calculation brings a higher proportion of piece-rate workers under minimum wage protection.

If you think that you are not being paid the NMW you should contact the Acas Helpline on 0300 123 1100 for free advice. A helpline adviser can refer your case to National Minimum Wage enforcement officers at HMRC, who have powers to collect arrears on your behalf, to fine your employer and to include their name on a public list of employers who don't pay the National Minimum Wage.

You can also seek further advice from your union, or if you are not a union member, contact an advice agency such as the Citizens Advice.

Note: This content is provided as general background information and should not be taken as legal advice or financial advice for your particular situation. Make sure to get individual advice on your case from your union, a source on our free help page or an independent financial advisor before taking any action.