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Case Annual Averaging Minimum Wage Permitted

Posted on: Dec 09, 2013

An employer’s claim that weekly wages that were less than the minimum wage, paid to a farm worker when cows were being milked, could be offset against wages that were higher than the minimum wage, paid to the worker when the cows were dry, so over the year the employer was complying with the Minimum Wage Act 1983 was unsuccessful.

An employer is not complying with the Minimum Wage Act by averaging out payments made to an employee, who is paid weekly, throughout the year.  A Labour Inspector on behalf of Mr Almao, the worker, gave evidence that except in the dry season Mr Almao worked 60 hours a week for three weeks, with the fourth week at 49 hours per week and in the dry season Mr Almao worked between 38 and 44 hours per week.

The Authority found for the duration of the dry season Mr Almao was paid above the minimum wage but for all other weeks his rate of pay was less than the minimum rate in the applicable Minimum Wage Order. It said he was entitled to be paid the difference between the amount of salary he received and the relevant weekly minimum rate during the milking season.

The Authority noted that Mr Almao’s employment agreement provided that salaried employees would be paid by equal weekly instalments and said that the relevant unit of time for measuring Mr Almao’s minimum entitlement was therefore one week. It said payment by way of salary could not be used as a mechanism to avoid the rates set out in a Minimum Wage Order.

Disclaimer

This article, and any information contained on our website is necessarily brief and general in nature, and should not be substituted for professional advice. You should always seek professional advice before taking any action in relation to the matters addressed.

Disclaimer

This article, and any information contained on our website is necessarily brief and general in nature, and should not be substituted for professional advice. You should always seek professional advice before taking any action in relation to the matters addressed.

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