Commission only pay

The requirements of the Working Time Regulations and the National Minimum Wage (NMW)/National Living Wage (NLW) created problems for those organisations that pay their sales people on a commission only basis. This is because the WTR enshrine a workers rights to 5.6 weeks' paid annual leave and the NMW/NLW require workers to be paid at least at the current minimum rate for the hours they work, regardless of results. The tests to be applied as to whether an individual is genuinely self-employed (the now archived HMRC IR56 guidance) compound this issue by making it more difficult to claim that such individuals are 'self-employed'.

One potential solution to these issues is to structure terms & conditions of employment in such a way that such employees are allowed to 'draw' against commissions at the rate of the NMW/NLW.