Skip to main content
Global HR Lawyers

How does a leap year impact national minimum wage?

31 January 2024

This is a leap year and, with 29 February falling on a Thursday, employers need to watch out for a possible breach of national minimum wage requirements.

When we think about leap years, we often think of the tradition of women proposing marriage to men on 29 February. This tradition apparently comes from the idea that, historically, 29 February was not a legally recognised day and so women were freed from convention and legal restrictions. Times have changed, of course, and 29 February is now very much a legally recognised day. This year, it falls on a Thursday so, for many of us, it’s an additional day of work.

This means that, if you have workers paid at (or around) the National Minimum Wage, you need to be sure that the extra day of work doesn’t result in pay falling below the legal minimums (currently £10.42 per hour for workers aged 23 and over).

Hourly paid workers

A leap year causes little risk of non-compliance for hourly paid workers. Their pay will already vary according to the number of hours worked. In other words, their pay is already likely to be different month-to-month and a leap year does not make a difference to how you calculate their pay. If they work an extra day in February, they would be paid for this at their usual hourly rate.

Salaried and unmeasured work

A leap year is most likely to impact workers doing “salaried hours” or (possibly) “unmeasured” work.

HMRC’s definition of “salaried hours work” is more restrictive than a job that attracts an annual salary. For an employee to count as doing “salaried hours work” it must be possible for HMRC to calculate the exact number of hours that they are required to work each year in exchange for their salary. Where that is not possible (for example because additional hours may be required during peak times), they will most likely be treated as doing “unmeasured work”.

The difference between “salaried hours work” and “unmeasured work” is that “salaried hours work” can be averaged across a year, but “unmeasured work” cannot.

With “salaried hours work”, there is a difficult question about what multiplier to use in a leap year where hours are expressed as weekly. HMRC do not provide guidance on the correct multiplier to use in a leap year, but many payroll systems will make an adjustment (usually moving up from 52.14 weeks to 52.29 weeks) to ensure that pay does not fall below National Minimum Wage. Some use a higher standard multiplier (e.g. 52.18) in every year to account for leap years (although it is unclear whether that is strictly compliant).

For a worker earning a salary but actually doing “unmeasured work” it will be important to ensure that their earnings in the pay reference period that includes 29 February do not fall below minimum wage when divided by the number of hours worked in that pay reference period. For those paid monthly, the risk of this will be low because, even in a leap year, February only contains 29 days.

Offering TOIL in a leap year

Some employers offer Time-Off-In-Lieu (or TOIL) in a leap year to avoid the extra day of work. If you are doing that, it’s important to ensure that you have clear records of the TOIL and, if possible, ensure that the TOIL is taken in the next pay reference period.

Check for compliance

Compliance activity around National Minimum Wage is back to pre-pandemic levels and HMRC is returning to “naming and shaming” those who do not comply (even in cases where they recognise that a breach was unintentional). As a result, even though the sums involved are likely to be relatively small, and it’s not as romantic as a marriage proposal, it is important to check that you have made the necessary adjustments for the leap year to ensure you are National Minimum Wage compliant.

Related items

Related services

Back To Top