National minimum wage - the basics and who is entitled to it

Who need not get the national minimum wage - volunteers and voluntary workers

Definitions

'Volunteer'

Volunteers do not have any contract of employment or contract to perform work or provide services. They are not workers and therefore are not covered by the National Minimum Wage Act 1998. This means they do not qualify for the national minimum wage (NMW).

If an individual described as a volunteer was in fact a worker (see below), they would qualify for the NMW unless a specific exemption applied.

'Worker'

Under Section 54 of the National Minimum Wage Act 1998 all workers in the UK qualify for the NMW, unless a specific exclusion applies.

If you have a contract of employment then you are a worker. Even if you do not have a contract of employment, you are a worker if you are doing work personally for someone else under a worker's contract, such as a contract to personally perform services, and are not genuinely self-employed. For homeworkers, work or services may be performed personally or passed to family or friends without affecting qualification for the NMW. See the page in this guide that covers who must get the national minimum wage - workers, agency workers, agricultural workers, homeworkers.

The contract does not need to be written - it may be an implied or oral contract, so the absence of a written contract does not automatically mean that someone is not a worker.

Any organisation can engage workers. For instance, just because an organisation is run by volunteers or for charitable purposes, that does not mean that the people it engages cannot be workers.

The worker test

Determining if someone qualifies for the NMW depends on whether they satisfy the definition of a worker, and if so, whether one of the exemptions applies.

A person's status will ultimately depend on the circumstances under which they work and whether they are performing as a worker. Key elements in establishing whether someone is a worker include:

whether there is an obligation on the individual to perform the work and in return an obligation on you to provide the work
whether the individual is rewarded, such as through money or benefits in kind

When this guidance refers to a 'worker' it is referring to worker in this sense. If somebody is a worker, they will qualify for the NMW unless a specific exemption, such as the voluntary worker exemption, applies.

'Voluntary worker'

The term 'voluntary worker' has a specific meaning for NMW purposes.

A voluntary worker is a type of worker (see above) who is exempt from qualifying for the NMW. Voluntary workers must work for a charity, voluntary organisation, associated fund raising body or statutory body. The benefits in kind and expenses they can receive are limited, and certain conditions must be met to ensure that the voluntary worker does not qualify for the NMW.

The key differences between workers, voluntary workers and volunteers

	Characteristics	Employer	Qualify for NMW
Volunteer	Not a worker	Any employer or organisation	Does not qualify
Worker	Works under a contract of employment or a contract personally to perform work or provide services	Any employer or organisation	Qualifies, unless a specific exemption applies
Voluntary worker	Works under a contract of employment or a contract personally to perform work or provide services	Charity, voluntary organisation, associated fund raising body or statutory body	Does not qualify due to a specific exemption provided certain criteria are met

'Expenses'

An expense is an outlay of money, which an individual has had to make. In some circumstances, an organisation may wish to reimburse such an expense, although there is no obligation on them to do so.

Tax and benefits implications

If a volunteer or voluntary worker gets any money or benefits in kind for volunteering apart from out of pocket expenses there may also be tax implications and repercussions for people who are claiming benefits.

You can find out more about the treatment of expenses payments if you are a voluntary worker on the HM Revenue & Customs (HMRC) website - Opens in a new window.

'Benefits in kind'

For NMW purposes, a benefit in kind is a non-cash benefit or facility of any kind. Typically, a benefit in kind would have some monetary value and the provision of it would incur some cost on the provider.

'Subsistence'

For NMW purposes subsistence is generally taken to mean such food, drink and basic day to day needs as are needed in the circumstances of the employment, ie the voluntary role.

'Charity', 'voluntary organisation', 'associated fundraising body' or 'statutory body'

These are the bodies who can take on voluntary workers. For NMW purposes the following definitions apply:

A charity is a body of persons, or the trustees of a trust, established for charitable purposes only.

A voluntary organisation is a body of persons, or the trustees of a trust, which is established only for charitable purposes - whether or not those purposes are charitable within the meaning of any rule of law - benevolent purposes or philanthropic purposes, but which is not a charity, such as a local community group.

An associated fundraising body is a body of persons, the profits of which are applied wholly for the purposes of a charity or voluntary organisation, such as a charity shop.

Statutory bodies are bodies set up by an Act of Parliament to carry out given functions, such as local authorities, many schools and hospitals, and bodies such as English Heritage.

Volunteers

Volunteers do not qualify for the national minimum wage (NMW) because they are not workers. Volunteers can volunteer for anybody, not just organisations in the not-for-profit sector.

The job title or label an individual is given is not conclusive in determining whether someone is a volunteer or a worker. An individual who considered themselves a volunteer may in fact be a worker if the arrangements under which they provide their services amount to a contract of employment or a contract to personally perform work or services.

If such a person is a worker, they will qualify for the NMW unless a specific exemption applies, such as the exemption for voluntary workers.

Volunteers and expenses

Reimbursement of reasonable out of pocket expenses alone is unlikely to change an individual's status to one of a worker. Each case would be considered on its individual facts.

You may prefer to reimburse only expenses actually incurred and many volunteers prefer this. If reimbursing estimated expenses, you must be able to explain how you arrived at the level of expenses and be able to justify why this was a reasonable estimate.

Care should always be taken to ensure that the provision of expenses does not suggest that an individual is a worker. Should this happen, a worker would be entitled to the NMW unless a specific exemption applied, such as the voluntary worker exemption.

Volunteers and honoraria, gifts and nominal recognition items

A genuine honorarium in the form of an unexpected gift, with no obligation and of a small value is unlikely to change a volunteer's status to that of a worker, giving the right to the NMW. However, care should be taken to ensure that this does not create a contractual relationship whereby a person is undertaking work in return for gifts or rewards.

Items of nominal value such as pins, t-shirts or baseball caps given in recognition of volunteering, for instance to mark the successful end of a task or project, would be unlikely to result in the person being regarded as a worker and entitled to the NMW.

Volunteers, and uniforms and equipment

If you provide a volunteer with clothing which they may retain, and which is needed as part of their duties, such as to enable them to be distinguished from members of the public or to remain warm while volunteering outside, the provision of such clothing alone is unlikely to result in the person being regarded as a worker for NMW purposes. You should note that items provided:

must be reasonable - ie a uniform for a volunteer helping at a golf event is reasonable, providing a set of golf clubs is not
should be required in order for the volunteer to perform their duties - eg someone volunteering to usher crowds at an outdoor sporting event may need trainers, a jumper and a jacket to perform their duties

Volunteers and attendance at events

Where attendance at an event is necessary in order for the volunteer to carry out their duties this alone is unlikely to result in the person being regarded as a worker. For instance, where a volunteer sells programmes at a football match and as a consequence has free entry to the ground, watching the football match by itself is unlikely to result in the person being considered a worker for NMW purposes.

Volunteers and training

Examples of training not considered a benefit in kind for NMW purposes include:

training necessary for the volunteer to perform their duties
training for the sole or main purpose of improving the volunteer's ability to do the work
training necessarily acquired in the course of the volunteering

As long as training meets this criteria, any resulting qualification would also be unlikely to be considered as a benefit in kind. Training over and above this criteria would result in a person being considered a worker and entitled to the NMW.

Volunteers, and food and drink

Volunteers are sometimes provided with a meal or drinks during the volunteering day. Reasonable provision of food and drink would not suggest that the volunteer is a worker and eligible for the NMW.

Volunteer agreements

You may have written agreements with your volunteers or may have written to them with confirmation letters, for instance outlining:

the ethos of your organisation
opening hours or attendance expectations
what is expected of them
your organisation's rules and procedures
insurance indemnity provisions for them

As long as these agreements are intended to clarify the reasonable expectations of the volunteer and your organisation and are clearly not intended to amount to a contract of employment or a contract to personally perform work or services, they will not make the individual a worker and entitled to be paid the NMW.

Should such a document become a legally binding contract of employment then the individual would be entitled to the NMW, unless a specific exemption applied.

Imposing a requirement on an individual undertaking to comply with a mandatory statutory obligation such as health and safety, or providing health and safety training would not on its own result in the individual being classed as a worker and entitled to the NMW.

Voluntary workers

Voluntary worker is a term which is used in the National Minimum Wage Act 1998. It has a specific meaning for NMW purposes.

Voluntary workers are a class of workers who have an exemption from qualifying for the NMW. The exemption is at Section 44 of the National Minimum Wage Act 1998.

Voluntary workers may not be called such by the organisation who engages them. They may be people who consider themselves 'volunteers' but who are in fact workers due to the arrangements under which they work.

However, if such individuals meet the conditions of the voluntary worker exemption, they do not qualify for the NMW. This exemption is designed to allow people who genuinely wish to work without profit for good causes to continue to do so without fear of qualifying for the NMW.

Although the fact that individuals are voluntary workers is not always known, the distinction is particularly relevant when you are considering whether the individuals that you engage may qualify for the NMW, or in the event of a dispute over eligibility for the NMW.

In these circumstances, if a 'volunteer' turned out to be a worker, the voluntary worker exemption would act as a safety net as long as the conditions were met, ensuring that the individual still did not qualify for the NMW.

Who can employ a voluntary worker?

Voluntary workers can only be engaged by a charity, voluntary organisation, an associated fund-raising body or statutory body. Community Amateur Sports Clubs registered with HMRC under the Finance Act 2002, schedule 18 are treated as being charities for the purposes of NMW enforcement.

Voluntary workers and expenses

Voluntary workers may not receive any monetary payment apart from the reimbursement of:

expenses incurred in the performance of duties
from 14 January 2009 expenses incurred in order to enable the worker to perform their duties

In both cases you can reimburse those expenses actually incurred, or a reasonable estimate of those expenses likely to be or to have been incurred. You should always be able to explain how you arrived at the level of estimated expenses reimbursed.

Voluntary workers and expenses incurred in the performance of duties

These are expenses incurred while the individual is undertaking their work and could include having to travel from one site to another while performing duties, being sent to purchase something as part of the duties, or having to pay for a hotel while performing duties at a conference.

Voluntary workers and expenses incurred in order to enable them to perform their duties

These are expenses which occur outside of the voluntary work, but which are needed to enable the voluntary worker to undertake it. Such expenses must be both necessary to undertake the voluntary work, and reasonably incurred. Examples may be:

expenses to cover the cost of care of dependants needed to enable the voluntary worker to do the voluntary work
expenses to cover the cost of a lunch during a break in the voluntary work - although the cost of the lunch should be reasonable and not excessive, otherwise it would not be 'reasonably incurred'
expenses to cover the cost of travelling to and from the voluntary work

Accommodation costs such as rent cannot be reimbursed to voluntary workers. However, voluntary workers may be provided directly with such accommodation as is reasonable in the circumstances of their work.

Voluntary workers and benefits in kind

Voluntary workers may not receive benefits in kind apart from:

the provision of such subsistence as is reasonable in the circumstances of the employment - the 'employment' is the voluntary role
such accommodation as is reasonable in the circumstances of their employment
such training as is outlined below

Voluntary workers and training

The following examples of training would not be considered a benefit in kind for NMW purposes:

training necessary to perform the duties of the voluntary worker
training for the sole or main purpose of improving the voluntary worker's ability to do the work
training necessarily acquired in the course of the voluntary worker

As long as training meets this description, any resulting qualification would also be unlikely to be considered as a benefit in kind. Training over and above this would result in a person being considered a worker and entitled to the NMW.

Voluntary workers and subsistence payments

A voluntary worker may receive monetary payment for subsistence where they are engaged as a result of arrangements made between a charity acting in pursuance of its charitable objectives and another charity, voluntary organisation, associated fund raising body or statutory body. Such arrangements might include recruitment, funding and brokering arrangements.

Subsistence payments must:

Be solely for the purposes of providing subsistence. Subsistence means the basics to live such as food, drink, laundry, basic toiletries, medicine, heating and lighting. A level of payment which is set to provide an income on top of subsistence needs will not be considered solely for the purposes of subsistence and will result in the person not being considered a voluntary worker.
Be an appropriate amount to provide the basic day to day needs of the individual in the circumstances of the employment. You must be able to demonstrate how you have reached the appropriate level of subsistence for the employment in question. For instance, someone who is living in a bed and breakfast for the duration of the voluntary work and has no access to cooking facilities may need more money to cover food and drink expenses than someone who is living at home as they are unable to cook their own meals. Yet they would be unlikely to need money for heating and lighting as this would be provided by the bed and breakfast. You should also consider the other expenses and benefits in kind that the voluntary worker is receiving. For instance, if breakfast is being provided to a voluntary worker then subsistence payments should not include money for breakfast.
Not include payment for accommodation. Voluntary workers can be directly provided with such accommodation as is reasonable in the circumstances of the employment, but cannot be given money to find or pay for their own accommodation.

Where a voluntary worker is engaged directly by a charity, voluntary organisation, associated fund-raising body or statutory body rather than as a result of the arrangements outlined above they can be provided with such subsistence as is reasonable in the circumstances of their employment, but cannot be paid money for subsistence. If a voluntary worker who is not engaged as a result of such arrangements is given subsistence payments then the voluntary worker exemption will not apply.

For further clarification on the points above, see our examples of when NMW does and doesn't need to be paid to voluntary workers - Opens in a new window.

Record keeping

There is no obligation on organisations that employ volunteers to keep specific records for NMW purposes. However, in the event of a disputed claim, you may find it useful to have basic details such as the names of volunteers, hours volunteered and any payments given to individuals (such as expenses). You should always be able to explain how you arrived at the level of any estimated expenses reimbursed.

Subjects covered in this guide

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