Homeworkers will no longer miss out on being paid the full minimum wage should proposed changes to the rules get the green light.

Currently over 700,000 people are classified as homeworkers, with many deemed unfairly penalised by the way that minimum wage payments are calculated.

The government plans to end the practice of paying only for "estimated" hours worked by homeworkers, and instead wants payment to be made for all hours worked, or at a "fair piece rate".

"Homeworkers and their employers have told us that the rules in this area have not been working well and we are determined to help them," said employment minister Alan Johnson.

"The national minimum wage is one of this government's finest achievements, but we are not complacent when it comes to enforcing the rules and when necessary, we will tighten them up."

Groups representing those set to gain from the move said it was a step forward.

"We welcome any changes that make it easier for homeworkers to work out whether their piece rate equates to the national minimum wage," said Linda Devereux, director of the National Group of Homeworkers.

"The new rules should simplify the process and make it more difficult for employers to exploit homeworkers, who can at the moment legally pay homeworkers only four-fifths of the national minimum wage."