Ministers waive back pay penalties owed by care homes but enforcement action to continue
Historic financial penalties owed by care homes who have underpaid their workers for overnight sleep-in shifts are to be waived, the Government has announced.
Learning disability charity Mencap said since 1999, care homes operated under advice that time spent asleep by care staff in residential homes and supported living residences didn’t count as work time for the purposes of the National Minimum Wage (NMW).
The payment of a flat rate “on call” allowance had been the norm across the sector ever since, it said.
Following two employment tribunals, new guidance in October last year recognised that the previous guidance was wrong and the NMW should be paid for sleep time instead.
But Mencap has previously said that the unintended consequences have been “disastrous as HMRC have begun enforcement action demanding back pay”.
It estimated that the total bill for back pay – in some cases dating back six years – could be £400 million.
Many providers would be unable to meet the demands and could face insolvency because of it, the charity said.
Now ministers have announced it will waive historic financial penalties owed by employers who have underpaid their workers for overnight sleep-in shifts before July 26 this year and temporarily suspend HMRC enforcement activity concerning payment of sleep-in shifts by social care providers until October 2.
The measures are intended to “minimise disruption to the sector”, a spokesman said.
But he added that the Government remains committed to making sure workers in this sector receive the minimum wage they are legally entitled to, including historic arrears.
Commenting on the announcement Royal Mencap Society chairman Derek Lewis said: “As the Government well knows, the critical issue for providers of vital sleep-in care for those with serious learning disabilities is the unfunded liability for six years’ of back pay.
“This arises out of the Government’s change in guidance on the application of the National Living Wage, coupled with aggressive HMRC enforcement action.
“The announcement of a brief two-month stay in enforcement action is welcome, as is the assurance that penalties will not be levied on top of the back pay liability, but neither addresses the catastrophic impact of the £400 million back pay bill across the sector on providers, people with learning disabilities and care workers in one of the most vulnerable sectors of society.
“Employers are keen to fulfil their responsibilities to employees. But if the Government changes the rules on how sleep-in payments should be paid, it must expect to have to pay for the changes.
“We reiterate our call to Government to accept its responsibility and make an urgent commitment to fund the back pay bill, for the sake of those vulnerable people who depend on this care and for the dedicated people who provide that care.”
Unison general secretary Dave Prentis said: “This announcement is a huge blow for low-paid workers.
“Each year, care workers are collectively cheated of £130 million in wages, but this outrageous state of affairs has failed to prompt any meaningful reaction from the Government.
“Now ministers see fit to cave in for employers, many of whom have been ruthlessly exploiting care workers for years.
“There is nothing in the Government’s plans that sets out how ministers will ensure care staff get the money they are owed.
“It sends out a message to care workers that they are of little value.”
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