Minimum wage – are you paying enough?

While the country’s elite sportsmen have significant earning potential, it may come as a surprise to some that those plying their trade in the lower leagues – as well as younger professionals – often receive very little more than the National Minimum Wage (NMW).

Occasionally, on the face of it, some players receive less than the NMW as their basic salary.

In football, the regulations of the Football League provide for a “minimum weekly wage for full time contract players of £90 per week or such greater sums as shall be specified by law from time to time”.

The NMW applies to most workers over compulsory school age. Professional sportsmen will fall within this bracket, as they have a contract of employment with their Club.

Which rate applies?

There is a NMW "Apprentice" rate, which applies where workers are employed under a contract of apprenticeship and aged under 19 (or, if over 19, are in the first 12 months after the start of their employment under that contract).

This rate, and the young workers rate, might be applicable for the young professionals who, in football, are typically engaged on the contracts paying a basic weekly wage of £90.

There are different NMW rates depending upon the category of worker, including a standard/adult rate, development rate, apprentice rate and young workers rate.

Whether a player has received the NMW will depend on their average hourly rate. This is calculated on the basis of the total remuneration earned over the relevant "pay reference period" and divided by the total number of hours worked over the pay reference period.

The "pay reference period" is the period used for calculating hourly pay. For weekly paid employees, the pay reference period will be one week.

To calculate the total remuneration for the pay reference period, the club must take the player's gross pay (before deductions for NICs and income tax) and deduct from this any payments/deductions that reduce the NMW.

Often players will receive additional payments to their base salary, including bonuses and other incentive payments as well as pension contributions.

As for what is included from a NMW perspective, the following elements of pay count towards the NMW: basic salary, bonus, commission and other incentive payments based on performance (this is likely to be particularly relevant here) and accommodation allowance.

The following elements do not count towards the NMW and will be disregarded when calculating total remuneration: benefits in kind whether or not they have a monetary value (aside from accommodation allowance above), loans, advances of wages, and pension payments.

The number of hours worked by the worker during the “reference period” is calculated differently depending upon the type of work done by the worker (time work, salaried hours work, output work or unmeasured work).

Much will depend upon what an individual player’s contract states about the player’s working time and/or how many hours each week (in practice) he is actually working.
A sportsman is obviously distinguishable from an office worker doing nine to five, as players will normally only “work” by going into training for a few hours and playing on match days.

Each case will turn on its own facts and the specific contractual provisions would need to be considered. However, it is likely to be in respect of working time and the additional payments that count towards the NMW (such as performance related payments like appearance fees and win bonuses) where clubs will be able to argue that they are not falling foul of the NMW by paying such a low (basic) weekly wage.

Clubs should be mindful of their NMW responsibilities, both in respect of playing staff and others employed within the organisation.