Question
My wife and I are the directors of our family company. I have been told that we are not affected by the National Minimum Wage because of the family business exemption. Is that correct?
Answer
I am afraid it's not as simple as that. It is true that there is an exemption for family members working in the family business, but the regulations specifically refer to the employer's family.
If the family business (i.e. the employer) is a limited company, then it does not have a family. Even if the family business operates as a sole trade or partnership, the only family members exempted are those who actually live at home.
Thus on the face of it you and your wife would have to be paid at least £3.60 each per hour (£3.70 from October 2000). However there is a way round this requirement if you are able to implement an agreement between you and the company to the effect that there is no form of contract of employment or any other form of workers contract between you and the company.
You should bear in mind that such a 'contract not to have a contract' will have the effect of excluding all your employment protection rights.