Thursday 12th November 2020

The recent case of Commissioners for HMRC v Ant Marketing highlights that, when calculating whether the national minimum wage (“NMW”) has been paid, deductions for the cost of training is expenditure ‘in connection with employment’ and so may be treated as ‘reductions’. This means that if training costs are deducted, and this takes employee pay below the NMW, the employer is in breach.

This is the case even if the deductions are a contractual liability, are contingent on the event of an employee leaving within a certain time period, or only represent a proportion of the training costs incurred by the employer. Where training is mandatory, the expenditure is much more likely to be regarded as ‘in connection with employment’ (and therefore treated as a reduction for NMW purposes). However, deductions for non-mandatory training may also be treated as a reduction, depending on the circumstances.

If a worker has not been paid NMW, they can enforce their entitlement by making a claim for breach of contract or for unlawful deduction from wages, HMRC can enforce the worker’s entitlement by issuing a Notice of Underpayment, and/or the employer may be guilty of a criminal offence if it has refused or wilfully neglected to pay the worker their entitlement.


Where employees are paid NMW (or close to it), employers must bear in mind the consequences of any deductions from those wages. Deductions made for training, even where not compulsory or are only payable in the event the employee leaves employment, may be treated as reductions and cause the employee’s pay to drop below NMW. This can have serious financial and criminal consequences for employers.

If you would like to discuss this further, then please contact a member of our employment team.  To view the rest of our November Employment Law Update, click the button below.